That’s it, it’s happening, end of the month, ready or not, here it comes. HMRC’s equivalent to the Death Star (well some people think so) - Making Tax Digital. Unless you’ve been living under a rock you have probably heard about MTD, but is it really that big of a deal?
Well – that depends. In a nutshell, MTD requires businesses to file their tax returns online and keep digital accounting records. So right now it’s only a big deal if you are a VAT registered business or about to operate over the VAT threshold. If you aren’t you can sit back and chill right? Right?
What does Making Tax Digital mean for businesses?
This is the dawn of the new age – HMRC finally picking up that digital baton and running (although slowly, possibly with heels on through treacle) to the next base – exactly, the next base. Do you actually think they will stop at VAT? This is the precursor to rolling out all taxes, business and personal digitally. So, you may have dodged the VAT bullet, but the gun is locked and loaded ready for the next implementation. Look at it as the first step in a long process that’s aimed to get all your business affairs and practices online. We are living in the 21st century after all.
Can you still use spreadsheets and be compliant with MTD?
The handy thing is you don’t actually need to get new spangled software – you don’t have to pay out on upgrades – your current little spreadsheet is sufficient as long as you use the bridging software so it can “talk” to HMRC, you my dear friend, are covered!
All these people running around like headless chickens and the good old spreadsheet is actually fine. Panic over. Job done. Problem solved. Nailed it. Sorted. At least for now.
Should you use spreadsheets instead of software?
Can I ask, if you are turning over enough to be VAT registered, is a spreadsheet really the safest way to go? I mean don’t you want things to be more secure? Cloud based back up if the laptop dies a painful blue screen death? And the ability to have a quick mooch through your numbers on your smart phone could potentially be handy right? Even maybe invoice on the fly?
Actually even if you aren’t turning over that much surely my questions still apply?
Maybe this is the nudge you needed to explore the big wide world of online accountancy. As Xero Silver Partners we have been doing this for quite a while, we know how daunting, but easy it can be. And almost all of our clients tell us that it’s freed up so much time for them.
Not sure what to do – here’s the HMRC video explaining your options:
Our clients are all MTD ready, didn’t even have to do anything special to make it happen just use Numerical. Fancy joining them? Let’s talk…