Welcome Making Tax Digital
Chris Bailey CEO- Biography Chris Bailey is a Chartered Accountant who has been involved in the Accountancy industry for more than 30 years. Bailey Group Chartered Accountants was set up by Chris in 2004 and has grown to become one of the largest independent accountancy practices in the North East. Making Tax Digital
Our offices Bailey Group Chartered Accountants are an independent group of accountants with 7 practices in the North and 1 in St Albans Making Tax Digital
What is Making Tax Digital? Key facts • From April 2019 HMRC will require all businesses over the VAT threshold (£85,000) to submit their returns digitally • This is the first step in HMRC’s plan to digitise the entire tax system • If you currently record your VAT on paper you will need to start recording it digitally • It will no longer be possible to submit VAT returns using the Government Gateway portal Making Tax Digital
Making Tax Digital timeline Making Tax Digital for Public VAT pilot Public MTD pilot for Private MTD pilot for VAT begins launched Income Tax launched VAT launched April 2019 Autumn 2018 April 2018 March 2018 Making Tax Digital
Why is Making Tax Digital happening? • HMRC wants to make the UK tax system the most efficient in the world • Currently they believe there is a short fall of £9 billion in unpaid tax • They believe that introducing a digitised system will make it more effective, more efficient and easier for taxpayers to get it right • VAT is only the first stop, HMRC will be introducing Making Tax Digital for Income Tax and Corporation Tax in the future Making Tax Digital
Why is Making Tax Digital happening? Making Tax Digital
What is a digital record? • In order to submit your VAT returns digitally, you must record your transactions digitally • The digital record must include your business name, primary business, VAT reg number and the VAT scheme you are using • The software you use must also be compatible with HMRC Making Tax Digital
What software is compatible? • HMRC is working with more than 150 software suppliers • Software suppliers include; IRIS, Sage, QuickBooks and Xero • If you currently use us to submit your VAT return you will not have to do anything • You can find a list of approved software in the Making Tax Digital guide Making Tax Digital
How will this affect me? • Currently over half of businesses with turnover above the VAT threshold use software to submit and record their VAT • If we do your VAT return and you currently record your VAT using paper records you will need to start recording them digitally • If you are already recording your VAT digitally and/or using software all you will have to do is pass that information on to us or check that your software is compatible Making Tax Digital
How will this affect me? • The Government Gateway will be closed for VAT returns from 1 April 2019 • You will need to use software that communicates digitally with HMRC’s platform and not by manually entering the VAT return figures on the portal • There will be a ‘soft-landing’ period throughout 2019 where you can use ‘copy and paste’ but from 2020 onwards the software you use must be fully compatible Making Tax Digital
Making Tax Digital
Positives • You can get rid of your non digital records • Free up time, you can do MTD on the go, anywhere, any time • KashFlow is a duel user so you can see it and so can we, meaning we can support you every step of the way • You will save approximately 27.5 days a year by switching to digital technology Making Tax Digital
What will happen if I don’t comply with MTD? • HMRC will be introducing a penalty system in 2020 for those who do not comply with MTD • Every time you submit an MTD report late you will gather points • Once a certain points threshold is reached, a financial penalty will be applied • For VAT the points threshold is expected to be 4 points which is the equivalent of a full years worth of returns Making Tax Digital
How will MTD affect my fees? • The Federation of Small Businesses estimate that the total cost of MTD will be £2,770 per year per business • This includes software costs as well as a rise in accountancy fees • MTD will require more staff per client as there is a higher level of compliance • We can work with you to find a solution that works best for you, either moving you to a Direct Debit payment plan or helping you move onto MTD compatible software Making Tax Digital
Our solution Making Tax Digital
Available software XERO QuickBooks Sage KashFlow MTD compatible Bank Feed Reporting X Multi-currency X CIS Making Tax Digital Invoicing
Virtual cabinet Client portal 24/7 access to your documents via our website Digital signatures Sign documents digitally, helping to speed up the approval process Better security GDPR compliant Making Tax Digital
What is Cloud accounting? Accounting software that is hosted on remote servers Security As secure as traditional accounting software, no trace of financial data on company computers Flexible Frees us up from having to install software on every machine Making Tax Digital
What is IRIS Snap? • IRIS Snap provides accountants with a mobile app service to take photos of there business record and receipts • The photos will then be automatically uploaded to KashFlow where you can manage and view your records on the go Making Tax Digital
Our solution • We are now a Cloud Accountancy firm and will be using IRIS KashFlow to efficiently manage bookkeeping for all of our clients • KashFlow can be used by you as well – if you want to manage your own bookkeeping • We will also be providing you with IRIS Snap – a mobile app that allows you to take pictures of receipts and send them directly to us Making Tax Digital
Our solution Our mobile MTD solution Making Tax Digital
Our solution • We can visit your workplace or office with our personalised mobile MTD system, where we will scan all your paper documents and then upload them straight to the cloud • This means that you won’t have to worry about digitising your VAT records yourself • The whole process will take under an hour Making Tax Digital
Our solution • We also have a Bailey Group App where you can access your client account and speak to us direct Making Tax Digital
Where can I find more information? To find out more information on MTD, visit our website at www.baileygroup.co.uk and visit the resources section of our website. Making Tax Digital
Any questions? Making Tax Digital
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