MTD Brochure

Myers Clark’s Guide To
Cloud Accounting
&
Making Tax Digital

Making Tax Digital - April 2019 A Useful Flowchart
What is it?

Making Tax Digital (MTD) is a From April 2019, businesses will Has the VAT Registered business had a
government initaitive aimed to be mandated to use the Mak- turnover of more than £85,000 in the last 12
make it easier for you to man- ing Tax Digital system for VAT
months on a rolling 12 month period?
age and pay your taxes. obligations. YES NO

• 2015 Budget had announced • Provide VAT information via Are there any YES Business is exempt
a path for digitising taxation in MTD compatible software. exemptions available YES Unless they have
the UK. made an election
• VAT Returns are to be filed for: not to be exempt.
• There were delays but July 2017 directly from software or API • Religious reasons
dates were confirmed. spreadsheets. • Insolvency. NO

• VAT registered businesses are to • Filing of VAT Returns will no procedures. MTD for VAT does
be affected from April 2019. longer be possible under the • Disability. not apply.
exisiting Government Gateway • Remoteness of
• The date for all other Portal.
businesses including Landlords location.
will be anncounced in due • A new electronic account will be
course. set up for all businesses. NO

• The reason behind Making Tax • VAT registered businesses with
Digital is that HMRC wants to turnover of less than £85,000
modernise the current tax are automatically exempt.
system to close the tax gap.
MTD for VAT applies.
• HMRC believe that by
keeping digital records, errors
will reduce.

• As a minimum you will
complete a quarterly return,
pluse a 5th one with any
adjustments. A sixth one will
eventually replace the current
tax return.

• Cloud Accounting and the use
of technology will make the
process easier.

Penalties The The Four Foundations of
Process Making Tax Digital

• HMRC has confirmed that HMRC’s View: Utilised information - Businesses will not have to provide HMRC with
the penalties for failure to “Software will calculate and information they already acquire, or with information they can
keep digital records will prepare the VAT Return from obtain from elsewhere, such as banks and building societies.
come into force your digital records. It will then Furthermore, digital accounts will allow individuals to view
immediately from April show the return to you and ask information that HMRC retains at any time.
2019. you to declare that it is correct Tax in real time - To alleviate errors, HMRC will collect and process
and confirm that you to sub- information that affects tax as close to real time as possible, allowing
• Penalties for late filing will mit it to HMRC. Once you have individuals to know how much tax they need to pay.
come into force in April submitted your return you will A single financial account - All businesses and individuals will be able
2020. receive confirmation through to view in their digital account a broad financial picture, emulating
your software that is has been the method of online banking.
• Two charge model will work Digital interaction - Interaction with HMRC by
as follows: received”. customers and their agents will be able to occur at a time that suits
them. The digital account they already possess will present to them
• If a payment or Time to Pay an increasingly individualised overview of their tax affairs, as well as
arrangement (TTP) is made advice and support through secure messaging.
or treated as made within
15 days of the due date no
penalty will be charged.

• Between 16 and 30 days
half a penalty will be
charged.

• After 30 days a full penalty
will be charged plus a
further penalty which will
then accrue daily until
payment is made or a TTP
treated as made.

• Penalty rates are yet to be
advised.

Why Cloud What Are Apps?
Accounting?
‘Apps are additional programs which can be used with cloud
• It complies with Making Tax Digital. computing software. They are generaly used to reduce the amout of
• It enhances a collaborative approach.
• Allows for mobile accounting. manual data entry’.
• Allows you to spend less time inputting data. • They are easy to use.
• It has real time links with banks. • They are easy to set up.
• Interfaces with lots of apps. • They usually have a monthly contract so there is no commitment.
• There is no need for back ups. • There is no hardware required as they are all browser based.
• Always up to date - more security.
App Ecosystem
What Are The Options?
Stock Invoice
Sage: Management Reading
- The UK’s favourite cloud product. Software
- Links with apps. Software
- 24 hour support.
Xero: Accounting
- Links with apps. Software
- Widely used.
- Support via webchat. EPOS CRM
QuickBooks: Software Software
- More secure bank feeds directly from the banks rather than screen
scrape through Yodlee.
- Better reporting customisable.
- Excellent CIS.
- Good UK support - they can take over your screen.
- Fewer apps but more robust links.
- More developers than anyone else.

Beyond Your Next
2019 Steps

• Every business and landlord • Evaluate your current
will use the income and bookkeeping system to see
expense category specified what changes will be
by HMRC, and will use the needed.
Electronic Account to
submit data. • Discuss your findings with
us.
• HMRC will phase out the
current portal for all taxes. • Decide what new system
(if any) is needed to ensure
• Four quarterly returns is you are compliant with the
expected and a fifth one new law.
with any adjustments.
• Implement and test your
• A final one replacing the new system with plenty of
tax returns called year-end time before April 2019.
declaration. This may come
with pre populated data Contact our cloud specialists on
that HMRC will have already. 01923 224411 or email:
Priya Raja Motala:
• At the moment, the focus [email protected]
is on businesses, and exact Or
details will not be confirmed Suzanne Daly:
until secondary legislation [email protected]
for other taxes is passed.

Contact us.
Myers Clark, Egale 1, 80 St Albans Road, Watford, WD17 1DL
01923 224411
www.myersclark.co.uk