Making Tax Digital – what every beauty business needs to know
We get it – navigating the new Making Tax Digital (MTD) guidelines can be time consuming.
At Timely, we’ve put together the ultimate guide to the MTD scheme, so you can nail your tax obligations and get back to what you want to be doing (we’re guessing tax administration isn’t top of the list).
What is Making Tax Digital and what does it mean for my business?
The MTD programme means that from April 1, 2019, UK businesses earning more than £85,000 will need to submit digital tax returns. All VAT tax returns need to be submitted digitally via the HMRC gateway.
Here are the key dates you’ll want to put in your calendar:
How do I get started?
- Make sure you’ve got a Government Gateway ID with the correct details: your name, date of birth, National Insurance number and email address
- Check when your first MTD submission is due. If you think your business might be exempt then ring the VAT helpline
- Work out how you’ll record your transactions digitally – Xero? QuickBooks? Another digital software platform? Or even bridging software?
How do I keep digital records?
Well, it depends on your existing business processes. Have you been manually managing your tax via spreadsheets, or do you already have an accounting software?
Option one: spreadsheet bridging software
If you don’t use a lot of tech in your business, then spreadsheet bridging software might be the best option for you.
This software extracts the contents of a spreadsheet and uploads it to HMRC. Both Xero and Quickbooks offer bridging software options, which can import data from spreadsheets into the Quickbooks or Xero interface and then submit a VAT return to the HMRC.
If you’re not ready to say sayonara to your spreadsheets, then consider a bridging solution.
Option two: accounting software
Shifting to accounting software like Xero or QuickBooks is a good option if you want to keep your tax administration as streamlined as possible.
Organisations that already use an accounting software should ensure that the supplier is MTD compliant. The HMRC has put together a handy list of MTD friendly software. See if your existing software solution made the cut.
HMRC-recognised software should:
- Record your finances digitally
- Link your business and VAT information to all your transactions
- Calculate the VAT you owe and remind you when your VAT return is due
- Supply your VAT data directly to HMRC.
Have you got the accounting software but want to streamline your other business processes? MTD is the perfect opportunity to make your whole business digital, from booking client appointments right through to bookkeeping.
If you haven’t already, check out Timely’s Xero or Quickbooks integrations. Manage your sales, appointments and tax obligations in one central, cloud-based platform. Timely gives you all the time saving tools your business needs so you can do more of what you love.
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