A realistic timeline for VAT registered businesses to keep digital records for Making Tax Digital (MTD) has now been outlined.
HM Revenue and Customs have announced this week in their updated guidance that all VAT registered businesses should keep digital records from their first VAT return starting on or after 1 April 2022, this means that all VAT registered businesses will be within the scope of MTD for VAT regardless of turnover. Those taxpayers voluntarily registered for VAT will be obliged to sign up for MTD by then at the latest. This is a significant step in the further implementation plan and provides clarity and what would for now appear ample time for these businesses to get their affairs in order.
As it stands if you are a VAT registered business with a taxable turnover above £85,000 you should be keeping digital records now and submitting VAT returns under MTD otherwise there are potential penalty implications. Many of these businesses are now taking advantage of the wonders of modern technology, especially what cloud accounting can offer. With automated data entry and real-time information, businesses have never before been in a place where maintaining their records has been so pain-free.
Xero Gold Partner Accountants Cheltenham
Xero is one of the leading cloud accounting software packages – it runs on the internet and to access it you visit a website and sign in with your username and password, which means you can use cloud accounting software from any device as long as you have an internet connection.
Making the transition from desktop accounting software to Xero is straight forward with the right expertise. At Randall & Payne we are proud to be Xero gold partners and have staff across all teams who are Xero-certified, including adviser, migration and payroll. This certification means that our team can log in to Xero accounts at the same time as the client and are able to answer questions and give advice at the time of need.
- Ease of use and peace of mind – Xero is mobile which means you can generate invoices on-the-go or process payments immediately. Data capture and entry are more automated using apps, reducing the time required. The software is secure and backed up online and is compliant with MTD for VAT regulations.
- Banking integration – Bank feeds can be imported with the introduction of Open Banking allowing banks to give secure data access to third parties. Xero connects to most of the UK’s major banks. Direct bank feeds will allow you to produce a flow of transactional data such as; streamlining bank reconciliations, expense management, and cash flow visibility. This reduces manual admin work and the risk of data entry errors.
- Time saving – As part of transitioning our clients to cloud accounting we give demonstrations of Xero and useful add-ons such as Receipt Bank. As automation of many bookkeeping tasks continues to become more prominent, Receipt Bank is an important tool for data capture. Gone are the days of manually keying in data to your accounting software, saving you time and removing the need to retain all receipts – just scan and then bin them!
We offer a full bookkeeping service for clients who would prefer to concentrate on their businesses, through to advising on appropriate packages, reporting structures and ‘add-on’ applications to complement the basic accounting package.
If you would like a Xero demonstration or need any help with Xero please call 01242 776000 or use our contact form to get in touch.
