HMRC is changing the way all self-employed, sole traders and businesses must submit their information from April 2019.
Put simply, this HMRC initiative will introduce the most fundamental change to the administration of the taxation system seen for years. It will require records to be digitised and updated more frequently than the current system, and will see the end of annual self-assessment. It is claimed that the new procedures will save money for the UK government while making life easier for the self-employed, sole trader and all sizes of business.
What will be the impact?
Businesses that are VAT-registered must comply with the new MTD regulations from April 2019, and those non-VAT registered must comply with MTD from April 2020.
In the most significant change, all those who are traders, landlords and businesses will have to submit quarterly returns under MTD. This does not affect those who are VAT-registered as quarterly returns are already undertaken.
In addition, companies must file Corporation Tax in accordance with MTD.
What is required?
From April 2020, all returns to HMRC will have to be submitted using compatible accounting software packages, such as Xero, QuickBooks and FreeAgent. HMRC does not approve or recommend any provider, but over 150 software companies have been working with HMRC to develop their products and ensure compliance with the MTD.
How can the Accidental Bookkeeper help?
I work using three of the leading software packages – Xero, QuickBooks, FreeAgent – that are MTD compliant and I can convert/update your books to ensure you’re ready for either April 2019 or April 2020.
There is a plethora of information available; click these links for more guidance.
Institute of Chartered Accountants in England & Wales: https://www.icaew.com/technical/tax/making-tax-digital
Thomson Reuters: https://tax.thomsonreuters.co.uk/making-tax-digital/