With Making Tax Digital (MTD) already playing a part in many organisations’ regulatory compliance and the rest to follow, we are exploring and explaining what this means for you and your business and how you can be confident you are ticking all the right boxes.
MTD for Small Businesses
- Making Tax Digital was first introduced in 2017 and between its inception and 2022 – all VAT registered businesses have been staged into the new legislation and now submit their VAT returns in line with the digital requirements.
- While for some businesses this has meant a big shift from manual record keeping to online bookkeeping, almost all of Whyfield’s clients were ready for the changes well ahead of the deadline as digital accounting is at the core of our service offering.
Mandatory MTD Requirements
- Further MTD obligations are on the way with non-VAT registered businesses needing to adopt digital record keeping from 2026. Businesses will be staged in terms of turnover size with those organisations turning over £50,000 being the first in line.
- This next stage of MTD will also include individuals receiving property income, even if you wouldn’t think of yourself as a business, so its important to understand how you will be impacted by these upcoming changes.
Benefits of MTD for Small Businesses
- Whist legislative changes can feel onerous and time consuming, at Whyfield we truly believe that digital accounting is an incredibly powerful tool and can empower you to take control of your finances and make informed decisions.
- Real time information has so many benefits including better cashflow management, less risk of bad debts, greater insight and control and the ability to plan for success.
Challenges and Concerns
- If technology isn’t your strong point or maybe you haven’t got the time to research the best system to use for MTD, we can help and support the transition from start to finish and have helped hundreds of businesses to move onto a cloud-based accountancy platform.
- Planning and allowing enough time before the deadline are key things to consider when thinking about MTD. This will ensure the least disruption and most positive experience with switching to digital.
Preparing for MTD Compliance
If you aren’t already using a cloud based accountancy software such as Xero, QuickBooks, Freeagent or Sage (there are over 150 to choose from) then its time to think about your MTD plan in 2024.
Many bank accounts offer free apps to help with record keeping and as long as its one of the HMRC approved software’s, this could be a cost-efficient way of making the switch from excel or paper records.
If you aren’t sure if you have something that will be MTD complaint, just reach out to ask us, we’d be happy to point you in the right direction.
MTD will be a requirement for all businesses in the coming years and getting ahead of the legislation and used to a new system with plenty of time should definitely be on your business to do list for the new year.