Making tax digital - Everything you need to know.

Digital Accountants since 2002

At AMAS we don’t just do accounts, compliance, tax returns, etc. In this digital age and with the Making Tax Digital (MTD) initiative looming (April 2019), having an accountancy partner that understands the complexities of online accounting is essential.

As an early adopter of digital accountancy services, AMAS happens to be uniquely positioned as one of Scotland's most experienced digital accountants.

What you need to know 

What does HMRC mean by being digitally compliant?

In the spring 2015 Budget, the Making Tax Digital (MTD) initiative was first announced. This introduced the requirement for quarterly reporting to HMRC via digital records for small businesses, landlords and the self-employed over the VAT threshold (£85,000) for VAT purposes.

 

When is the deadline?

Making tax digital will be introduced in stages.

  • From April 2019, businesses with a turnover above the VAT threshold will have to keep digital records for VAT purposes.
  • From 2020, businesses may be asked to keep digital records and update HMRC quarterly for other taxes (income and corporation tax).

What resources you need 

Do I need an accountant?

You do not need an accountant for Making Tax digital. However, we highly recommend working with an accountant to make the transition much smoother for you because they will:

  • know the HMRC plan for making tax digital (including the implementation schedule)
  • be familiar with accounting software that simplifies making tax digital for businesses

 

Do I need software?

Similarly, software is not necessary but HMRC encourages its use. Online accounting software is recommended as desktop software hasn't traditionally been able to submit tax online.

At Amas, we use Xero which can meet HMRC's requirements for digital compliance as it can be linked directly to HMRC. It can also:

  • automatically calculate the tax you owe (including VAT and payroll tax)
  • pull transaction data straight from your bank, your invoicing software, or your POS system
  • update your transactions every day, allowing you to stay on top of bank reconciliation
  • create digital records of paper receipts just by photographing them with your mobile phone

And yes, accounting software is tax deductible.

What steps you need to take 

Where do I start?

1. Find out when is best for you to make your tax digital

We recommend you do it soon, rather than rushing before the deadline. That way you will be comfortable enough with your new digital accounting system that you won't face penalties from making errors.

2. Consider online accounting software

Online accounting software is not necessary for compliance, but will make things far easier for you. It will also give you access to other powerful tools. Talk to us and we can explain the benefits of using Xero.

3. Assess your accounting support

Will you hire a tech-savvy accountant to help your business make tax digital? If so, now is the time to start looking for one as they will be busy during this transition period. As digital accounting experts, we have already digitised many of our clients' accounting systems and we would happily do the same for you.

Our complete solution for all your digital needs

We can do more than make you digitally compliant. Whether you're looking to just manage invoicing, bank reconciliation and/or book-keeping, or require an all-in-one forecasting and reporting application; Amas have a solution to fit your needs. Our Digital Accounting Services Leaflet helps explain the options available to you and how they apply to your business.

Best of Breed

Through many years of practice and experience, AMAS provide a 'best of breed' digital solution using two of the markets leading software solutions, namely:

Xero

Online accounting software for small businesses. Use Xero to manage invoicing, bank reconciliation, bookkeeping & more

Futrli

An all-in-one forecasting and reporting application that puts you in control of your business. For Forecasting, Scenario Planning, Cash Flow & more. Forecast tomorrow, understand today and action a better future for your business The seamless integration of Futrli with Xero means your data auto updates in real-time, which is a huge timesaver.

Intuit Quickbooks - Sage - Xero

Discover your digital readiness