I was recently asked to review someone's bookkeeping system as they were concerned the accounting package they were using would be no good when the rules come in for Making Tax Digital for Income Tax ...
Making Tax Digital for Income Tax is rolling out at some point. Is your account package ready for it?
As it was, this person was keeping digital records in a format that could easily be exported to Excel spreadsheets, and they had an accountant who took this data and produced their tax return. My advice, in this case, was to talk to your accountant first before making any drastic changes.
"It is currently a case for them of if it ain't broke don't fix it!"
MTD for Income Tax will be coming in at some point, but at the moment the date is not until April 2024 because the Government just delayed it for another year, and it is for businesses with a gross income of over £10,000 so micro businesses might be able to avoid it for a while longer.
Those that only send their accounts to their bookkeeper or accountant annually or do everything in a rush at the end of January (you know who you are!) will need to get a new accounting package in place as under MTD for Income Tax, you will need to keep your records digitally and report your financial information quarterly to HMRC. The timings of your tax payments are not currently looking like changing.
If you are concerned that your accounting package is not up to scratch you do have some time to get yourself sorted with a new system in place in plenty of time, but there is no rush to change your systems right now, especially after the extra year's delay.
The software providers will be developing updates so you can comply with the rules, but as of yet, we are not sure how it will all work. My best advice is get used to keeping your bookkeeping records up to date at least on a quarterly if not a monthly basis then you will be ready when the changes come in.
"Seek advice from a trusted accountant or bookkeeper before making any drastic changes!"
If you do want to get a new accounting package in place in time for Making Tax Digital for Income Tax, now due in 2024, and you are unsure where to start then why not book a one-to-one session with me, and I can help you get a great system in place.
Until next time ...
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more, it may be a great idea to give me a call on 01604 217365 and let's see how I can help you.
Alison loves bookkeeping and supporting bookkeepers. She has been helping clients to be better bookkeepers in Sage 50 for over 24 years and has been Xero Accredited in accounts and payroll for a number of years too.
She specialises in a very unique hand-holding method of training, helping bookkeepers and business owners to use their accounts software as and when they need support in setting up and producing their invoices, reports and financial information.
Alison combines her role at Silicon Bullet with her Forever Living network marketing businesses and is often to be seen at business networking meetings as she likes to keep busy.
You know what they say: if you want something done well ask a busy person!
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