You need a cloud accounting system that supports your business needs. We are tech-agnostic. However, this doesn't mean we don't have an opinion. Different cloud accounting systems have different pros and cons, price points, and support structures.
You may need a basic system to invoice clients, file VAT and complete monthly accounts. Or you may need a system that integrates with other apps and software for high-volume sales. What is most important is that you digitize everyone to the fullest extent so that you are not spending your precious time completing administration.
MAKING TAX DIGITAL FOR VAT
HMRC introduced "Making Tax Ditigal" for VAT in April 2019 and it was initially compulsory only for businesses that exceeded the VAT registration threshold (over £85,000 in turnover). However, since April 2022 it has been compulsory for every single VAT-registered business.
Making Tax Digital means you must:
-
keep digital records of all transactions; and- file VAT returns to HMRC using compatible software
Compatible software allows you to:
-
integrate your bank transactions;
-
send invoices to customers electronically;
-
attach supplier invoices to all expenses
These are digital records. In the event of a VAT enquiry from HMRC you will save time and money from having kept full digital records of all transactions.
If you have set up Direct Debit payments for VAT, as soon as we file your VAT return with HMRC it will initiate the Direct Debit process, meaning all filing and payment obligations are complete with the click of a button.
Making Tax Digital for Individual Self Assessment was originally planned to be implemented in April 2024, however it has been delayed by two years.
Simple ways sole traders can prepare for the change in two simple ways:
-
have a business bank account that is used solely for the business;
-
use cloud accounting software to invoice clients/customers - link the bank account with the software.
MAKING TAX DIGITAL FOR ITSA
