Making Tax Digital also known as ’MTD’. It means that all your tax information will be in one place – your digital tax account with HMRC. The HMRC will eventually require all taxpayers to use a cloud accounting software such as QuickBooks, Xero or Sage etc. that will link directly to HMRC.
Making Tax Digital is Cloud Accounting. You have probably become familiar with the "Cloud" as a form of digital back up for your photos and documents. Cloud Accounting quite simply is your accounts stored in the Cloud as opposed to files and ledgers in filing cabinets.
Making Tax Digital means your bookkeeping must be carried out on a cloud accounting software package such as Xero, QuickBooks or Sage. Desktop software packages are no more, you have to be linked up to the cloud. Small Business Accountant in Cardiff can help you!
As long as you have access to the internet, you can log into your accounting software package from any location meaning you can work whenever you want.
If you're VAT registered or you are approaching the £85,000 turnover mark then this applies to you. Cloud Accounting was set up by HMRC to make it easier for businesses and individuals to manage their taxes.
The online VAT Return in its current form will no longer exist for the majority of businesses. If you are the owner of a VAT business that MTD will affect, it will be compulsory to have a cloud accounting software system in place, whereby digital records can be kept and your VAT Return can be submitted directly to HMRC via the software.
1 April 2019 is quickly approaching and action needs to be taken now to ensure you are compliant with HMRC. Small Business Accountant Cardiff are fully up to date with the changes and can help you going forward.
Income Tax and Corporation Tax will eventually become digital, however this has been put on hold until April 2020 at the earliest. It is advisable to take steps now to digitalise your books and avoid any headaches further down the line.
The cloud accountancy software can be accessed at anytime, anywhere as long as you have access to the internet.
All information will be in the cloud, this means you will never lose anything.
Paper copies of everything will no longer be required as long as you have taken action to make a digital copy of all relevant paperwork and receipts.
The software links directly to HMRC saving you time in the long run.
Assessable on Laptop, Phone and Tablet.
Fully complaint with HMRC.
Reduced number of errors.
Real time accounting.
More accurate tax information.
Easier to keep track of how much tax you owe.
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