Rebecca Benneyworth, MBE

Operationalising Digital Tax: 3 Things you’ve got to do now

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What is involved?

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The whole regime is driven by the accounting record requirementThe requirement for businesses to keep their accounting recordsusing digital tools. • Once you have mastered this point the rest follows easily• Digital tools might be software, apps or even spreadsheets• BUT you will need software to support spreadsheet use

Getting a clear picture of what MTD really is

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ICAEW research February 2016• 25% of small businesses use software for record

keeping• 25% of small businesses use only manual records• 50% use a combination of manual records and

spreadsheets • HMRC’s relaxation of the rules makes very good sense– But do you want to stick with spreadsheets?

Current use of digital tools for record keeping

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We do not have the full answer to that question yet!Waiting on budget announcements

• Regard £10,000 as certainly exempt – both for landlords and traders• Digitally excluded – “not reasonably practicable”• No doubt you have clients with big changes to make

Who is likely to be exempt?

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Charities

CASC’s

Religious grounds(Plymouth Bretheren)

Other exemptions

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NOT quarterly accounts; NOT quarterly tax returnFrom digital records just update HMRC with the totals• Accruals / prepayments etc optional• No need to reconcile – no penalties for inaccuracy• Use headings on SA return for minimum analysis– Even three line account must use these headings in the records– More headings if desired

Quarterly updating – one month to do

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Ten months to finalise• But books are already written up and available to you• Can produce accounts more in “real time”– More meaningful– Better management tool

Annual final accounts for tax purposes

Making it happen

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Start work analyzing your client baseIdentify certain “In” and certain “Out” clients • In – over VAT threshold• Out – digitally excluded and less than £10,000 turnover• Now start thinking about their needs– Who will struggle?– Who is already nearly there?

Your clients

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What is your service offering?Choice of record keeping software• Cloud based?• Bank feeds?• How much will your firm be prepared to do?– Think about re-work issues– Time that is ordinarily low recovery and low profit

Your services

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What staff do you need?Have you got them yet?• Potential change in recruitment policy• More focus on bookkeepers and enablers• Training staff, train the trainer for clients!

Your firm

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Key decisions now!• Software – free choice?• Bookkeeping support offering• Early “subscription” for clients?• Early adoption – public beta?• Communicate with clients• SMILE – it will be fun!

Go and do it!

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April 2017 31 Jan 2020April 2018 July 2018 31 Jan 2019 Apr 2019

Timeline

Decision re subscribing clients

Public Beta opens

Register as an agent for MTD

First tranche of clients come into MTD

Continue migrating clients to MTD

First quarterly updates filed

Tax payment reminders for 2017-18

Quarterly updates continue – 31 Dec quarters

Payment on account reminders for 2018-19

Final annual confirmations for clients with 5 April year end

Preparing for companies to come into MTD

Start work on 2018-19 SA returns

Start work on 2017-18 SA returns

Continue work on 2017-18 SA returns

Complete work on 2017-18 SA returns

All non exempt landlords come in immediately

Last clients (31 March year ends) come into MTD

VAT comes within MTD

Start filing annual confirmations for early starts

Last SA returns filed

Start work analyzing your client base

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1. Start work analyzing your client base

2. Determine your service offering

3. Have a look at staffing

and…

Go Do It! (Don’t forget to smile!)

In summary:3 things to do now

Questions?

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orSlideshare at: http://www.slideshare.com/tag/QBCUK17