This is a huge and compulsory change towards quarterly accounting to HMRC, together with quarterly tax payments.
It will start with small self-employed businesses and those with rental income, for their first accounting period commencing after 6th April 2020.
VAT-paying businesses come on-line from April 2019 and for Companies paying Corporation Tax, MTD starts from April 2020.
Therefore, by 2020, we will have moved to a fully digital system.
HMRC advise that making quarterly payments will assist taxpayers with their cash flow!
The HMRC consultation does advise that simplified annual accounts will be introduced. However, the fact remains that those three extra sets of accounts will have to be prepared, in addition to the annual accounts and therefore there will be extra accountancy costs arising.
We can help
Here at P G Fry & Company, we are committed to giving clients good personal service, and value for money. All our software is Cloud based and secure. In addition, we are utilising new accountancy software which is also in the Cloud.
This reduces the book-keeping requirements by speeding up that process, so that quarterly and annual accounts can be prepared faster. This could help to keep the increase in costs to the minimum.
It is important that businesses and landlords adopt this user-friendly book-keeping system well in advance of the start date in April 2018, in order to minimise the disruption of the change to MTD.
Please contact us as soon as possible for your free initial consultation, so we can plan your way forward together.