When will you be affected?
You should be aware by now that HM Revenue & Customs’ initiative to Making Tax Digital comes into effect from April 2019. To be more specific, the first affected businesses are those that are VAT Registered and it come into effect for VAT periods beginning on or after 1 April 2019. So, for businesses preparing quarterly VAT Returns, the first one under the new scheme will be the quarter ended 30 June 2019.
How will it affect you?
For VAT periods beginning on or after 1 April 2019, HM Revenue & Customs are removing the facility to file VAT Returns through the Government Gateway, which will force businesses to maintain their accounting records using software which is compatible with HM Revenue & Customs.
Even if your business is one that currently maintains accounting records using software, we are aware that some software packages, and some older versions of accounting software, are not capable of submitting information directly to HM Revenue & Customs and action needs to be taken in these instances. You may want to contact your software provider.
Even if you are happy that your current software is ‘Making Tax Digital ready’, we recommend you continue reading to see how moving to the cloud could benefit your business.
Having reviewed a range of online accounting platforms, Kilby Fox has chosen to partner with Xero, the UK’s leading online accounting software.
This migration to an online platform will not only allow the team at Kilby Fox to provide a better service to you and the rest of our client base, it also gives you a better view of your business’s finances in real time, on any device.
Xero is simple to use and it gives you real-time view of your business finances anywhere, on any device. Connected directly to your business bank account, you can reconcile regularly, manage your expenses, send online invoices and get paid easily. As you can have unlimited users on your Xero subscription, both you and our team can have a real-time view of your accounts helping us to give you the best advice when you need it. In addition, it’s just as safe as your online banking.
What are your options?
We recognise and appreciate that each business is different and so we have identified several different options.
- Take out a Xero subscription and maintain your accounting records yourself, following a half day training session from one of our Xero Certified bookkeepers. We will also provide ongoing ad-hoc support to assist you with the transition.
- Take out a Xero subscription and maintain your accounting records yourself, following a half day training session from one of our Xero Certified bookkeepers. We will reconcile your Xero accounts each quarter to give you peace of mind, knowing that your data is accurate prior to the VAT Return submission.
- Take out a Xero subscription and maintain your accounting records yourself, following a half day training session from one of our Xero Certified bookkeepers. We will reconcile your Xero accounts each month to give you peace of mind, knowing that your data is accurate no a more regular basis, enabling you to make improved financial decisions.
- Take out a Xero subscription and send your purchase and sales invoices to us, on a monthly basis, for processing into Xero by one of our Xero Certified bookkeepers. We will connect your Xero account to your bank account which will allow us to reconcile your bank on a regular basis. Following the monthly reconciliation process, we will provide you with management accounts to give you an overview of your business which will enable you to make improved financial decisions. This option will also provide you with more free time to focus on running your business, or to just remove the burden of carrying out the more administrative tasks.
Of course, we will be more than happy to find a solution for your business if your requirements do not match those specifically listed above.
When do you need to convert?
Although the changes does not come into effect until 1 April 2019, an issues may arise where the change comes in part way through your financial year, meaning your accounting records may be prepared partly using one system, and partly using another. This is very likely to cause complications, not only for yourself, but also when it comes to preparing the year end accounts.
Therefore, we recommend transitioning following the end of your next financial year end, with the first transitions being those with a year end of 30 June.
Please do get in touch with Martin Crooke as soon as possible to discuss the next step by phoning the office on 01604 662670 or emailing email@example.com.