Another MTD delay

Many VAT registered businesses are now subject to the Making Tax Digital (MTD) requirements that mean all VAT returns must be submitted digitally. However, people who fall into the landlords or sole traders categories were due to comply with the MTD for Income tax rules from April 2023 onward.

This date has now been put back a year to April 2024. While that might appear to be good news, in that, if you fall into one of these categories, you have more time to get sorted, our advice is to get organised with digital accounting as soon as possible.

'What's in it for me?'

Change is always uncomfortable to start with, but the switch from manual or a spreadsheet to a digital-based system is more than simply keeping HMRC happy. There are many benefits for you too.

A digital accounting system allows you to:

  • Keep track of your profitability
  • Scan in receipts instantly with your phone so no more mislaid bits of paper
  • Keep an eye on your cashflow so you don't run into a 'dry patch' unexpectedly
  • Issue professional invoices and easily keep track of who owes you money
  • Make better decisions about when to buy assets or expand your operation
  • Link to your bank account so you can reconcile payments in and out in one place
  • Save you time in record keeping.

You spend less time juggling the numbers, your business is better organised, and you and your accountant can make decisions based on real time information.

Why now?

2024 looks like a long way off, so why switch before you need to? This is a valid question and the simple answer is that you'll be more efficient AND more effective. It's not just about saving time and being able to put your 'hand' on any of your accounting data with just a couple of clicks, but about improving your business. Being in control of your accounts means that you can see what you've got to work with before you start investing time in plans for growth.

If you're working with an accountant, a better organised set of accounts means that they spend less time managing and preparing your tax returns, end of year accounts, etc. If they have to work through a bag full of paper that takes time - and time is money. If you choose to submit manual accounts until you have to change, you'll almost certainly end up paying more for that level of service.

Don't make a mountain out of a molehill!

Accounting software is easy to learn, most people pick it up quickly and the cost of a monthly subscription is less than the cost of a networking breakfast!

Our clients get a 1-2-1 guided tutoring session to ensure they understand how the software works for them. Most decent accountants offer something similar.

If you decide you want to go it alone there are plenty of tutorials online - whether you choose Sage, Xero, Quickbooks or one of the other options. Our advice is to check that the system you choose is compatible with HMRC before you subscribe.

Once you take that step and convert your accounts to digital you'll wonder why you hadn't done it sooner. And you'll have serious 'smug factor' in April 2024 when others are panicking to get organised!