5 practical steps to get your practice MTD ready for April 2019
As we get ready for the impact of MTD, BTCSoftware has produced five top tips on how accountants and businesses can prepare for this revolutionary change. Paul Oldridge highlights some key points to consider.
Making Tax Digital (MTD) becomes mandatory on 1 April. It will affect everyone who submits their own returns, so that’s accountants in practice, accountants in business and VAT registered business owners.
There has been quite a lot of information regarding MTD. What we aim to do is make this information more relevant to you- Chartered Accountants.
Why the change in the first place?
HMRC feel that MTD is a vital part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs.
HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world. Making Tax Digital is making fundamental changes to the way the tax system works – transforming tax administration so that it is:
- more effective
- more efficient
- easier for taxpayers to get their tax right
How are they going to do this?
Well, HMRC is going to restrict the current gateway for those who are mandated. VAT-registered businesses with a taxable turnover above the VAT threshold are required to use the MTD service to keep records digitally and use software (like BTCHub) to submit their VAT returns from 1 April 2019.
The exception to this is a small minority of VAT-registered businesses with more complex requirements. These specific exceptions are listed below:
They will not be able to take part in the pilot now if you:
- are part of a VAT Division
- are based overseas
- are a trust
- are a not for profit organisation that is not set up as a company
- submit annual returns
- make VAT payments on account
As part of planning for the VAT pilot, HMRC continued to engage with stakeholders and listen to their concerns about business readiness for Making Tax Digital. HMRC has decided to delay mandation for these customers until 1 October 2019 to ensure there is enough time to test the service with them in the pilot before they are mandated to join.
Here are your five steps to help take the stress out of Making Tax Digital (MTD)
Make sure that everyone is up to date with the process of MTD -start with your staff then and your clients. It's not a complicated one to explain, but it can be daunting at first if you don’t know about anything about it.
2. Register as an Agent
As an accountant, you need to set up an Agent Services account to be able to register and set up your clients.
3. Get Clients to sign up
Make sure that your clients are signed up to HMRC’s pilot, you as an accountant can do this, but it’s advised that you encourage your client to do this, as they will become familiar with the process.
4. Organise your client data
Accountants will have time to segment their clients because they’re likely to have lots of enquires during this time- so it’s best to stay on top of the different onboarding dates organised.
5. Pick the right software
Bookkeeping is a vital part of your and your client's accounting process. If both do not want to move away from spreadsheets- that’s fine. Invest in Bridging Accounting software like BTCSoftware’s BTCHub for accountants in practice and industry and MTDfVAT for clients with a single vat number.
These solutions allow you and businesses to maintain their current way of working and they are still able to become MTD Compliant, as HMRC has approved BTCHub and MTDfVAT. Once your client has registered for MTD, there is no going back or reverting to the old HMRC gateway.
Multi-Award winning Tax software
BTCSoftware’s MTD Solution can be purchased as a standalone product for £250 (+VAT) for an annual licence. MTDfVAT can be purchased as a standalone product for £50 (+VAT).
Book a demo
Taking just a matter of minutes to set up, it comes with unlimited free support from our friendly UK-based team. BTCSoftware’s MTD Solution is available to buy and is approved by HMRC. You can now book a demo or order by contacting the sales team or call 0345 241 5030.
This blog is one of a series of articles from our commercial partners.
The views expressed are those of the commercial partner and not necessarily those of ICAS.