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IT ALL ADDS UP
So, you’ve set up your business and things are going great. You’ve launched, you’ve got the customers and now you’re busy all day, every day looking after the core of your business. You’ve had a great, but busy, week and you’re looking forward to your day off, maybe a couple of glasses of wine with your partner, a night at the cinema, a day at the park with the kids…
And then you remember, you need to get the wages organised for the next day, the VAT return’s due, and the bank manager’s asking for your management accounts. Cancel the day off, you now need to spend it in the office, knee deep in invoices, receipts and bank statements.
Ask yourself, is this why you got into business? What happened to the freedom to work when you want Where’s the extra time with the family you promised yourself?
Acumenica clients spend less time on their books and more time with their kids, or at the beach, or walking the dog, or in the pub or… whatever.
They can do this because we utilise the latest in technology to bring their accounts under control: Receipt Bank to manage your invoices and expenses, EPOS Link for your sales, linked bank feeds to manage your transactions, FreeAgent and Xero to stay compliant and manage the books, and Acumenica to provide the insight and expertise.
Making Tax Digital For VAT
Making Tax Digital (MTD) is HMRC’s initiative to digitise record-keeping and statutory reporting. VAT was chosen as the proving ground and on 1st April 2019, all VAT registered businesses with a turnover in excess of £85,000 are required to keep digital records for VAT purposes and submit VAT returns through HMRC approved software.
As a fully digital accounting firm, 99% of Acumenica clients probably don’t even know anything about the new regime: we’ve moved them straight over with a minimum of fuss and virtually no involvement from the clients.
However, we’re hearing reports that some businesses and local accounting practices have yet to address the MTDfV situation and are sleepwalking into a disaster. If, as of today, 23rd September 2019, you haven’t got yourself MTD compliant, you really are supping in the last chance saloon.
If MTDfV was introduced on 1st April, how can we be almost six months down the line and still not be compliant?
The way VAT reporting works is that, generally speaking, you must submit returns quarterly, and your VAT quarters will either end January, April, July and October; or February, May, August and November; or March, June, September and December. This is known as the VAT stagger. MTDfV came into effect on 1st April 2019 and the first period which it applies to was the first one which started on or after 1st April 2019. So, depending on your VAT stagger, the first VAT return which should be filed under MTDfV could be as late as the period covering June to August 2019, which is to be filed by 7th October 2019.
So everybody should be compliant by now, yes?
Nope, or to be more accurate, yup. But in order to provide a soft landing in the new system, HMRC allowed the first return to be filed using the old system – so you could still file without being MTD compliant right up until 7th September. But there are no second (or third) chances now. If you haven’t sorted this out, you need to act NOW. Your VAT return that needs to be filed on 7th October, 7th November or 7th December will need filed using compliant software, or you will be penalised.
What needs to be done?
There’s a common misconception that you just need to rock up with your shoebox of receipts as usual at the accountants and they’ll sort it out. This may or may not be the case. First of all, your accountant may also be a sleepwalker, and hasn’t done anything about MTD. Sounds unlikely, I know, but we are aware of some local practices who aren’t at all geared up for MTD, and if your accountant is in this boat, then you could have problems. Even if your accountant is on the ball, there are still steps which need to be taken to register you on the new system, bring you up-to-date and make sure everything is working fine. Best advice, don’t leave it until the last minute. Contact your accountant now, ask what they are doing in respect of MTDfV, and if you don’t like what you hear, get someone else on the case.
How can Acumenica help?
Acumenica are a fully MTD compliant practice and we are FreeAgent premium partners. This, combined with our experience in dealing with businesses with incomplete records, means we can get you up-to-date and fully compliant in next to no time. Call us on 0333 800 4303 or complete the Contact Us form and we’ll get right on the case for you.