MTD: Big changes are coming in April 2024; the way you keep your records and how often you report to HMRC may need to change. This is arguably the biggest change to how tax payers report to HMRC since the introduction of self assessment, it is going to require you to file quarterly, as well as keep your records digitally. April 2024 is not far away, prepare now and be MTD ready.
Who does this affect?
Any unincorporated business, or person who is self employed and/or a landlord, with a gross annual income of over £10,000, will need to comply with Making Tax Digital (MTD) by April 2024. If you are not already doing so, in order to comply with HMRC’s MTD requirements, you will need to:
- Maintain digital records, using compatible software, as required by HMRC’s guidelines
- Submit digital and accurate records to HMRC, on a quarterly basis
- Submit your final declaration
We strongly recommend that all those who are affected by the rules, which will come into play on 6 April 2024, start to move to a digital record keeping platform now so they are fully compliant by the deadline. HMRC states that MTD rules must be followed for the next accounting period that starts on, or after 6 April 2024.
What do I need to do?
Put simply, if you are not already maintaining your records digitally through an HMRC approved cloud accounting solution, you need to update your record keeping processes so you are MTD ready and to avoid HMRC’s penalties.
What does HMRC mean by digital record keeping?
HMRC requires those who are self employed or who have a property income of over £10,000 per annum to keep digital records of all business income and expenses. This should commence at the start of the accounting period you are signing up for and you will therefore need to plan ahead. You will need to use HMRC approved software which is compatible to MTD to maintain and submit your digital records.
CBW’s MTD solution
CBW has a cloud accounting team who will review your current systems, make recommendations and guide you through this transition to ensure you are ready for these compulsory changes. There are many opportunities to be gained from cloud accounting, which can save you time and money, and we will talk you through these as well.
Are you keeping your records digitally? If you’re not, please contact your usual CBW contact or a member of CBW’s cloud accounting team to arrange a complimentary meeting.
Why use CBW’s cloud accounting team to help you get MTD right.
Talk to us to identify and discuss exactly what you need to do to comply with MTD. We will provide you with various options so you can consider whether you wish to carry out all or some of the tasks yourself, or if you want us to look after the whole process for you. Our solution is flexible and we want it to work with you.
Our cloud accounting team has helped hundreds of clients get their businesses MTD ready for VAT. We have been waiting for the current changes relating to income tax, and although Covid-19 delayed this process, it is now happening and clients need to prepare.
Many of our clients who are now MTD compliant for VAT purposes, have had to adopt cloud accounting. Those clients are now enjoying the benefits that come with cloud accounting, of which there are many, and we would welcome a discussion with you to discuss how cloud accounting can help your business. Please click here to find out more about the advantages.