Making Tax Digital is not far away now, and it’s creeping up on us all slowly but surely.
There is less than a year to go now until any business that is above the VAT threshold will be made to keep their accounting records digitally, and submit their VAT returns using MTD-compatible software.
HMRC have already started a pilot which allows businesses to get started early on the scheme, but for those of you that haven’t wanted to start off early, you will need to ensure you are putting in the work now to ensure that you are ready for when the change takes effect. The change takes effect from April 2019, and here is a guide to help you get ready!
Conduct thorough reviews
Not all clients are going to ready to make the switch at the same time. To make sure that a smooth transition is made it is advisable to conduct a review of both yours and your clients systems to ensure that the relevant measures are in place to handle any extra reporting, data collection or workflow demands. It is also advisable to check that your tax and accounting systems are compliant for MTD.
Create an Agent Services Account
Now would be a good time to sign up for an Agent Services Account with HMRC. Doing this enables you to sign your clients up to MTD and access their accounts on their behalf. You will need to make sure that when you’ve signed your clients up to this service, you make them aware that from that moment on, they must keep their records digitally to comply with MTD.
Keep In Touch with your clients
Ensure that you stay ahead of the game of MTD by signing up to receive regular blog posts from HMRC on MTD. Once you have received these, you can divulge the information to your clients as it will keep MTD in their minds, and will also allow them to remember what responsibilities they have towards the subject themselves.
Leave enough time to adapt
Moving to digital record keeping is going to be a challenge, and for some it will prove more challenging than others. As a result of this switch, you need to ensure you have the time to work through finding new ways of working, whilst dealing with any errors that may be made in the transitional process. Speak to your clients and build in a schedule that allows time for an increased workload initially.
For more information on Making Tax Digital, please search online or visit the HMRC website where you will have access to a wide range of materials and information relating specifically to the subject.