Let me set the scene…
You’re a business owner. You have a never ending to do list. Emails come in daily. Phone calls from random utility companies come in regularly. Business is doing well. You keep on top of things. Life is good, albeit busy. You’re still not completely sure what GDPR is but you’re doing your best. Then somebody mentions MTD. You nod politely and wonder what’s MTD? Great another thing for you to read up on.. when you get five minutes. Oh wait, you’re running a business, those five minutes don’t exist do they 😉
I get it.. Completely. It seems every year there’s something new for business owners to get their head around. Well MTD is just another ‘thing’ that as a business owner you do need to be aware of and the quicker the better. Here’s my simple explanation of what MTD is and how it will affect you.
MTD stands for Making Tax Digital.
Basically HMRC now want all business owners to keep their accounts electronically. The day of the paper folders and printed spreadsheets are coming to an end. I know… you may start worrying about this but there’s really no need. It just means some changes are needed but
You’re a Business Owner! You can handle this..
You ‘ve handled worse challenges than this one so take a deep breath and keep reading.
What do you need to do?
I don’t know how you currently handle your accounts so I’m going to approach this like you hold paper receipts in a box and either sit and do your accounts or you hand them over to an accountant once a year hoping they tell you there’s no receipts missing.
The receipts you keep in a box now need to be scanned or photographed and uploaded to an accounting program. This means that even if you lose the receipts, there is always an electronic copy of them to refer back to.
You can continue to do your accounts yourself but you will need some help to do this via a digital platform. You can either;
- Upload your receipts to an accounting software that is compatible with HMRC or
- If you are just can’t give up the spreadsheet life, you can get help via bridging software which will connect your spreadsheet to HMRC.
There is of course, still the option to retain your paper receipts and give them to your accountant once a year but this will, most definitely, cost you. I will write a separate blog on my recommendations on which systems to use and why shortly and I will link it here but for now I just want to reassure any UK business owner that whilst it may seem like a big deal, it’s not coming into affect until April 2021 so there’s plenty of time to adapt before HMRC make it mandatory.
My advice would be to do it sooner rather than later. This will allow you to continue with your usual accounts submission and run the new system side by side so you’re happy with it before changing over completely.
If there’s anything I can help with, please just drop me a message and I’d love to hear how your business is going.
Written by Alexis
Alexis is a Business Consultant. She is an experienced Business Owner and is also a qualified Bookkeeper. You can usually find her with a coffee and smile.