Given recent issues, to me this is good news and reduces additional short term stress on small businesses.
For sure, it's comming down the line .....
"The government has announced that Making Tax Digital for Income Tax will now be introduced in April 2024 - a year after it was originally scheduled to start.
Businesses and sole traders will have an extra year to prepare for the next stage of Making Tax Digital - for income tax self assessment - as HMRC has said it recognises the challenges facing UK businesses and wants to give them more time to get ready.
It means that Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) will now be mandated for businesses and landlords with a business income over £10,000 per annum in the tax year beginning in April 2024. Simple partnerships will not be required to join MTD for ITSA until the tax year beginning in April 2025."
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quarterly reporting? I always do my paperwork and tax return during the wet and cold bit before christmas.
Book keepers will be disappointed with the delay, but I agree small traders should be happy as those that outsource their book keeping work will presumably save money in fees for the time being. A friend of mine has spent this weekend collecting all his invoices and bills together from the last year so that he can take them to his accountant in the next week or so .......... the writing is on the wall for this style of financial management, far more regular and disciplined approach to financial record keeping will be required, sensible advice would be to use the delay as an opportunity to get all your ducks in a row and hone a system that suits going forward. Book keepers will be looking forward to an increase in the demand for their services one would imagine - albeit a bit later than they may have hoped.
I Can't really see that it will make much difference to book keepers/Accountants, if you present your books in an orderly way. I'm a bit old school in so much that I have one file with receipts and invoices so the accountant would just have them quaterly instead. I'm guessing that the online accountant packages can pull figures out quaterly at the press of a button. At really no extra cost so book keepers would need to factor that into price increases. To be fair though its going to be the last minute brigade who will suffer the most. You just need to get organised although Tim makes a fair point about the cold / wet and the lure of the office.
Hi Ben, the point I was making is that most people rely on their Accountants to submit their self assessment tax returns annually at the moment. Going forward to the future prposals this will need to be completed quarterly, this will raise costs for sure if an accountant or book keeper is engaged. There will surely be an increase in demand for bookkeeping services across the board as few tradesmen will have the knowledge and confidence to work out their own numbers, tax allowances, provisions for depreciation etc. Gary is right to point out the positives of regular financials being prepared - better to review more frequently and adjust budgets accordingly rather than wait to some time after the year end to find out whether trading has been worthwhile.
Hi Richard, It will be interesting to see. It may be that going for an online accounts package might be an eaiser option for many which could have an adverse effect on accountants. I've not used an online system and not really looked into the cost or the benefit. But if its linked to HMRC it may well be the time to change over. Gary is right, regular updates sure helps make financial planning eaiser. I have a spread sheet which I update so I can compare months and even go back a few years to see what I was doing. Work smarter not harder.
Ben - yes I think it will be interesting to see how it all pans out - in the mean I totally agree - smarter not harder.
If the costs do go up with accountant time/fee etc, being that it's inforced the government should throw us a bone and allow us to offset 100% of the accountancy fees.
I thought you could already?
You can if it's a wholly & exclusively business expense : https://www.gov.uk/expenses-if-youre-self-employed/legal-financial
What!?
I had know idea! My accountant has never offset 100%.
I'am at my Witt's end with my accountant, a never ending special of greed and incompetence!
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