The other day, this article about Making Tax Digital (MTD) in Accountancy Today caught my eye. According to research by cloud accounting software firm Quickbooks, it takes accountants an average of 7 days to make a business MTD compliant.

The study also found that many businesses are resistant to becoming compliant with Making Tax Digital. The top reason for this is firms that don’t feel they are digitally savvy enough.

Both of these insights interested me. As a larger accountancy firm, we already have a lot of experience in helping clients to comply with Making Tax Digital. So, if you’ve still to get up to date with MTD, I thought it would be helpful to show you how (relatively) painless the process is.

Why become MTD compliant?

The top reason for becoming compliant with Making Tax Digital is that you have to. If you are not compliant by certain deadlines, you can face penalties.

You can find out more about the requirements and deadlines in our guide, What is Making Tax Digital? However, these are the deadlines by which you have to move to a system of digital tax records and returns.

  • MTD for VAT. April 2021 (turnover of £85,000+) or April 2022 (turnover under £85,000)
  • MTD for Income Tax. April 2024 (self-employed and landlords with income of £10,000+)
  • MTD for Corporation Tax. April 2026 (at the earliest).

What do I need to do to comply?

As you can see from the deadlines, VAT registered businesses need to comply first. If your turnover is over £85,000 and you haven’t yet complied, you’ll be facing problems. Get in touch with us as soon as you can so we can help you.

However, if your turnover is under £85,000, you need to act very soon.

If we are your accountant, we are unlikely to need the full 7 days to make your business MTD compliant. However, these are the ways we can help you comply before April’s deadline – and they do take time.

  • We can recommend cloud accounting software that suits your business. There are a range of different options suited to larger businesses, smaller businesses and buy-to-let landlords.
  • We can help you migrate your accounts to the new software. This is one the most daunting steps and we can help you get it right.
  • We can give you assistance on using your cloud accounting software to comply with MTD.
  • We can sign you up for MTD as soon as your software is up and running.

However, we strongly recommend making the transition to MTD compliant software sooner rather than later. It’s better if you have time to become a confident user of the software before the MTD deadline arrives.

The perils of leaving MTD compliance to the last minute

While we can make sure your business is MTD compliant within a relatively short time, if you leave it until the last minute there’s a risk we won’t be able to help you. Over one million businesses across the UK will have to register and comply with MTD in April 2022. As a result, we expect demand for our help to peak as we approach the deadline. So if you want to make sure you don’t miss the deadline, get in touch with us today. The sooner you contact us, the better we’ll be able to help you.

Need further advice on any of the topics being discussed? Get in touch and see how we can help.

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About Jon Pryse-Jones

Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.

An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”

Jon’s appreciation for THP extends to his fellow team members and the board.  “They really know how to run a successful business,” he says.  He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.

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