Is your turnover Over the VAT Registration Threshold (£85,000)? Are You Ready for HMRC’s Making Tax Digital?

Rowan Van Tromp from PJCO Chartered Certified Accountants talks about the compulsory digitisation of tax for some businesses from the 1st of April and what software they recommend to make this transition easier.

What is Making Tax Digital?

From 1 April 2019, businesses (including sole traders, landlords, limited companies and partnerships) with taxable turnover above the VAT registration threshold (currently £85,000) will have to:

1. Keep their records digitally (for VAT purposes only)
2. Provide their VAT return information to HMRC through Making Tax Digital compatible software

What is a digital record?

HMRC accept a digital record to be a record of data extracted either manually or automatically from the original record. This does not mean the original record, such as a paper receipt or invoice, will need to be captured and stored in electronic format, but by doing so you would alleviate the need to keep and store the equivalent paper records.

We are experts in automated expense capture and processing systems Receipt Bank, Auto Entry and Expensify, all of which integrate with our preferred accounting software QuickBooks Online. Digital records are first captured through these systems then pushed through to QuickBooks, with records stored in both the expense capture system and QuickBooks Online.

This level of automation will save you hours of time and provide you with a much more usable information system.

What software will be compatible?

We recommend QuickBooks Online as the best software solution for small to medium sized businesses and have 4 of the top 10 rated accountants* according to the QuickBooks “Find An Accountant” portal.

Businesses will be able to continue to use spreadsheets for record keeping, but they must ensure that their spreadsheet meets the necessary requirements of MTD for business (such as passing relevant information across to HMRC every quarter), which will involve combining the spreadsheet with additional software to perform the upload of data to HMRC.

A list of other compatible commercial software can be found here - https://www.gov.uk/government/publications/vat-returns-and-ec-sales-list-commercial-software-suppliers/vat-commercial-software-suppliers

How can we help?

Our specialist small business technology team provide award winning implementation training and support for QuickBooks Online and related applications, to help our clients leverage the best in operational and administrative small business technology applications, that integrate with QuickBooks so they can get ahead of their competition.

Join Rowan for our Bite-sized Learning: Making bookkeeping simple with QuickBooks Online to learn more about how QuickBooks can help you with tax digitisation. 

*By client rating on https://quickbooks.intuit.com/uk/find-an-accountant/ as of February 2018.

Thanks to Rowan Van Tromp from PJCO Chartered Certified Accountants for writing this blog.

If you want to contribute to the Chamber blog, contact us on hannah@brightonchamber.co.uk