You don’t have to wait until January!

April signifies the start of the new year (financial year obviously!), although we doubt this is news to any of you! (If you want to know why it’s April then have a looksie here). And what better way to start a new year than to tidy up last year?
 
Unsurprisingly, a lot of people don’t finalise their books from the previous year in April, with a large amount of people not getting around to their tax return until December & January, leaving them little to no time to prepare for the bill due 31st Jan – so why wait?
 
With so many people waiting until the last minute to file their returns, help may not always be available. So why not just do your return now? Getting it done early will mean it’s a weight off your mind, knowing what you’ll have to pay in January and gives you plenty of time to ensure you’ve got the money available, you won’t have to pay anything early just because you’ve put your return in early!
 
It also means that if there’s any questions raised that you stand more chance of remembering the answer as it won’t have been so long ago, if it’s about a transaction in April at the start of the FY and you wait until January it’s 21 months between them so the chances of remembering is slim! 
 
Of course, we’re not expecting an influx of people wanting to get their tax return done early, but if we manage to convince one person to do it sooner rather than later then it was worth the time it’s taken to write this blog! 

Did you need to go digital?

With the first monthly VAT submission due a few months ago in June and the first quarterly MTD VAT submission due a few days ago on 7th August, we’ve heard of some people who were still unaware they needed to comply. Will there be a raft of fines sent out by the HMRC to businesses who haven’t submitted digitally or will there be any leniency? 

The official notice on MTD for VAT introduced a ‘soft landing’ on penalties for the first 12 months, but this is only in respect of the digital links used for transferring or exchanging data between programs, so claiming to be unaware of needing to submit digitally will fall outside of this scope. Indeed HMRC have the power to charge a penalty for failure to keep the required VAT records with a maximum penalty of £500. 

The HMRC also have the power to charge a penalty of up to £400 for filing a VAT return other than electronically without their prior agreement (VAT regulations 1995 reg. 25A), a power that’s not been used much but which will be extended to include using compliant software to file.

Again, a ‘soft landing’ approach is expected but only when a trader has made reasonable efforts to comply – saying you didn’t know you needed to is again unlikely to fit the bill. 

So if you find you should have gone digital but didn’t, please feel free to get in touch and we’ll help you get on the digital track.

Making Tax Digital – What you need to do

There’s been a lot of shouting about Making Tax Digital (MTD) kicking off on 1stApril, with HMRC trying to ensure everyone who needs to know, knows. Equally though, we’ve heard stories of people who are still using journal books saying “it doesn’t apply to us as we’ve not had a letter”. So maybe you’re one of the people that is unsure or doesn’t think it applies to them? 

Put simply, if you are a VAT registered business with a taxable turnover above the VAT threshold, you are required to use the MTD service from 1stApril 2019. There are a few small exceptions that can be found here but for the most part people must be using software to keep their records in a digital form and file their VAT returns using software. Importantly, copying and pasting information from one location to another features in the list of things that are NOT compliant when it comes to the final figures (so you can copy and paste during normal operations but you can’t copy and paste the figures to be submitted around, they have to transfer electronically). 

There’s a lot of information out there, not always in the clearest form, so if you need any help or advise please feel free to contact us, we’re here to help!