Originally written by Timothy Adler on Small Business
The rollout of Making Tax Digital, HMRC’s rolling scheme for businesses to self-report tax owed, should be halted before it reaches the smallest of businesses.
So says the cross-party public accounts committee in its report on bridging the £31bn tax gap between tax owed and what actually comes into the Treasury’s coffers.
MPs warned that it was unclear whether the controversial rules had achieved their stated aim of reducing tax errors.
>See also: Making Tax Digital bridging software: what is it and how much does it cost?
Since April 2019, VAT-registered businesses and the self-employed people with a turnover in excess of the £85,000 VAT threshold have been forced to use accounting software when they file their returns.
From April 2022, HMRC wants all VAT-registered businesses to adhere to Making Tax Digital. Self-employed people and landlords with a turnover of more than £10,000 will face the extra requirements from 2023.
Critics say the cost of applying the new rules has been unreasonably high. A report by trade body Association of Taxation Technicians found that some small businesses had been forced to spend more than £5,000 on software and training.
>See also: Five steps for small businesses Making Tax Digital
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Labour to stop rollout of Making Tax Digital to all small businesses if it wins
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Labour will stop the rollout of Making Tax Digital to all VAT-registered small businesses if it wins the general election.
Currently, MTD only applies to VAT-registered small businesses with turnover higher than £85,000. However, HM Revenue & Customs is planning to extend MTD to all VAT-able small businesses in its drive to find more revenue.
Rebecca Long-Bailey, shadow business secretary, told Radio 4’s Today programme: ““We’re going to scrap quarterly reporting for companies with turnover under £85,000.”
Long-Bailey was speaking on the morning Labour published its 20 Pledges to Business document, which encapsulates Labour’s thinking when it comes to helping small businesses, which Long-Bailey describes as “the lifeblood of our economy and our communities”.
>See also: Business rates reform key, says Labour business chairman Rachel Reeves
Although most of the 20 pledges have been announced elsewhere, those of most interest to small business are:
Reform business rates
Introduce statutory annual revaluations to stop small businesses facing periodic and unmanageable rate hikes
Guarantee a fair and transparent appeals process
Exclude new investment in plant and machinery from future business rates valuation to encourage investment
Establish a £250bn UK National Investment Bank
The National Investment Bank and a network of regional and national development banks will
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Best UK small business accounting software 2019 – review guide
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
As every entrepreneur knows, with everything going digital, more and more is being pushed onto the poor small business owner.
This year, HMRC rolled out its Making Tax Digital initiative, compelling 1.2 million VAT-registered businesses which earn £85,000 plus in turnover to file returns online. Those businesses now must submit their quarterly VAT returns under the new system.
However, it’s not going to stop there – MTD will be widened to include income tax and corporation tax from 2021 onward.
Given that moving to small business accounting software is inevitable for every SME, surely, it’s time to put away your paper and pencil (or your standalone Excel spreadsheet).
To help you decide, we’ve looked at the best UK small business accounting software packages on the market.
Best UK small business accounting software
Every small business is different. Most small businesses can make do with basic functions like invoicing, bank reconciliation, income and expense tracking and financial report generation.
Indeed, most UK small business accounting software offers the same features, it’s just that you may feel more comfortable with how one is designed over another – and then of course, there’s the cost.
Best accounting software for UK small businesses 2019
FreeAgentSage Business
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Why businesses should rethink their accounting software for Making Tax Digital
by Ben Lobel • • 0 Comments
Originally written by Ben Lobel on Small Business
Now that Making Tax Digital is here, you should be moving your accounting software to an online or cloud platform if you haven’t done so already.
Going from the consultation documentation available, HMRC has no plans to provide their own free software. This forces the majority of businesses to obtain a software which will be suitable for business use.
So, which accounting software should you go for?
It largely depends on the type of business you run. Each business has to decide based on their personal circumstances. For SMEs specifically there are a number of different cloud software systems currently out there which are capable of recording transactions online. Here are some to consider:
Xero
Xero has several plans which businesses can choose from depending on their needs. The prices below are only available for a limited time and will increase after three months.
Starter: £5 + VAT per month. This package is suitable for small businesses or contractors as it only allows you to send up to five invoices and reconcile up to 20 bank transactions per month. This price will increase to £10 after the first three months.
Standard: £12 + VAT per month. It doesn’t restrict you
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HMRC’s new digital VAT rules – 6 steps for submitting tax returns correctly
by Partner Content • • 0 Comments
Originally written by Partner Content on Small Business
Making Tax Digital (MTD) for VAT is new HMRC legislation that forms part of a wider plan to eventually digitise all tax for UK businesses. All VAT-registered businesses with VAT-able sales above the annual VAT threshold (currently £85,000) are now required by law to keep digital records and file digital VAT returns through MTD-compatible software.
The majority of businesses need to do this for VAT periods that started on or after 1st April 2019 and around a million UK businesses are required to submit their VAT returns under the new system.
When you run your own business, changes to tax legislation can often seem intimidating but complying with Making Tax Digital needn’t feel that way. This checklist walks you through how to get up to speed with the new rules and how you and your business can benefit from the new system.
Register for MTD with HMRC
If you haven’t already done so, you’ll need to register for MTD with HMRC as you won’t be registered automatically. You can do this by visiting HMRC’s website. Once you’ve done this, you’ll need to connect your HMRC account to your chosen software. Be aware that it can take up
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Small businesses who missed first tax return deadline spared HMRC fine
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
HMRC is dismissing fines for around 120,000 businesses who missed the first Making Tax Digital deadline on August 7.
A significant one in four businesses failed to file on time, meaning that HMRC could have issued tens of millions of pounds worth of fines. Officials said that they wouldn’t issue the penalties because businesses are ‘fully focused’ on exiting the EU come October 31.
Fines sit between £100 and £400 (linked to the gross turnover of the business) but the Government did say back in February that there would be a “light touch” approach to penalties, but this is the first time no fines have been issued.
The move comes amid a series of leniency measures to help businesses ahead of a possible no-deal Brexit.
MTD bothersome for businesses
HMRC said that it wanted to help businesses transition into Making Tax Digital, supporting the 490,000 companies with sales above the VAT threshold of £85,000 who were due to file by August 7.
Though some missed the deadline, nearly a million businesses registered for MTD beforehand and 900,000 VAT returns were successfully submitted through the service.
Deputy CEO of HMRC, Jim Harra, said: “We are very pleased that nearly a million
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Making Tax Digital bridging software: what is it and how much does it cost?
by Anna Jordan • • 0 Comments
Making Tax Digital comes in on 1st April and VAT-registered businesses with a taxable turnover of more than £85,000 must have the right software in place for it. However, it seems that many don’t. HMRC’s own research indicates that one in five firms (19%) that are required to be MTD-compliant by the beginning of April haven’t even
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Making Tax Digital exemptions deadlines are unrealistic
by Stephanie Spicer • • 0 Comments
VAT registered individuals and businesses needing to apply for an exemption from the new digital VAT requirements- Making Tax Digital (MTD) – have little time to do so, according to the Low Incomes Tax Reform Group (LITRG) MTD for VAT applies to businesses with taxable turnover exceeding £85,000 but as the threshold is based on
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Making Tax Digital: what do I need to do before it’s introduced?
by Anna Jordan • • 0 Comments
We are now less than a year away from the start of Making Tax Digital (MTD). Margaret Laidlaw, partner at Mazars, provides an overview of what MTD is and what you need to do before it’s introduced. What should I expect? The first raft of affected businesses will be those with a turnover above the
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Why Making Tax Digital could make a large dent in the UK’s tax gap
by Anna Jordan • • 0 Comments
The UK has one of the lowest tax gaps in the world, with the latest available figures (covering the 2015-16 financial year) showing a gap of 6 per cent between the amount of tax due and actually collected. When these figures were first announced, HMRC was quick to herald the fact that this gap is
The post Why Making Tax Digital could make a large dent in the UK’s tax gap appeared first on Small Business.