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Online Accountancy : Preparing your business for digital filing
Chartered Accountants – M . B . McGrady & Co – is one of the largest and most-respected independent practices in Northern Ireland . With offices in Downpatrick , Belfast and Newtownards , M . B . McGrady & Co Chartered Accountants represents a diverse range of SMEs , family run businesses , agri businesses , charities and sole traders across Northern Ireland .
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rom April 2018 , tax filing is going online , and businesses will have to report quarterly to HMRC . The solution is for businesses to keep track of their business records digitally and migrate their accounts to online accountancy software .
This is a complete overhaul of the way tax payers will submit their records to HMRC and a lot of businesses , especially SMEs , have valid concerns about this change .
This month , we meet Conaill McGrady , Director of M . B . McGrady & Co Chartered Accountants , for some expert advice on making tax digital ( MTD ) and how the M . B . McGrady team is helping business owners across Northern Ireland to prepare for the change .
What exactly is Making Tax Digital and why is it happening ?
Put simply , Making Tax Digital ( MTD ) is a government initiative to digitise the UK ’ s tax system , with the aim of making the whole process of administrating tax much simpler and more efficient . All of your tax information and interactions will be in one place , and you ’ ll be able to pay tax based on your business activity during the year , uploading or updating your tax accounting in real time .
What is the timescale for rollout ?
Businesses , selfemployed people and landlords will need to submit quarterly updates to HMRC and keep their records digitally by 2020 , but this will be phased in . The current plan is to start quarterly reporting from April 2018 for landlords and selfemployed , with micro businesses next to go online .
We recognize that , as accountants , we have a huge role to play in simplifying this process for our clients and M . B . McGrady & Co is committed to helping clients to prepare for the change .
We have already successfully implemented new digital accountancy software into many of our clients ’ businesses , and even though April 2018 is around 12 months away , we ’ re recommending that business owners consider online software now to ensure a smooth transition when the new tax system is implemented .
How will it affect businesses ? If you own a business , you ’ re selfemployed or you ’ re a landlord and you pay income tax ,
30 www . businessfirstonline . co . uk national insurance , VAT or corporation tax then it ’ s very likely you ’ ll be affected . This means that you ’ ll be required to keep track of your tax affairs digitally using MTD compatible software , and to update HMRC at least quarterly via your personalised digital tax account .
We believe that HMRC ’ s long term aim is to eliminate the annual tax return entirely , and this is the first major step in this process .
With all major changes , preparation is key and the longer you have to prepare , the more prepared the business will be come April 2018 .
Digitising tax isn ’ t going to be a simple transaction for business at the outset , however by starting the process now , businesses will have the time to understand how the changes will affect them , implement digital systems and adjust business routines to ensure compliance .
Essentially there are three main outcomes of Making Tax Digital :
1 . Tax in real time Businesses will not have to wait until the end of the year or longer to know how much tax they should pay . HMRC will collect and process tax relevant information as close to real time as possible , to help prevent errors and stop taxdue or repaymentsowed building up .
2 . Tax in one place The Making Tax Digital project is all about making tax as efficient and modern as possible . At present , most taxpayers can ' t see a single summary of their liabilities and entitlements in one location , but through this process , taxpayers will be able to see their complete financial picture in one place just like internet banking .
3 . Interacting digitally with HMRC Business owners will be able to interact with HMRC digitally and at a time that suits them . The digital record keeping software that they choose to use will be linked directly to HMRC systems , allowing business owners to send and receive information directly from their software .
M . B . McGrady & Co . believes that for businesses , having the right financial software in place will be critical in terms of preparation for MTD and the company ’ s three offices are on hand to offer suggestions and advice as to what packages will work best for businessowners .
MOREINFORMATION
For more information , please call the specialists at M . B . McGrady & Co on 028 4461 6321 or contact via email : info @ mbmcgrady . co . uk