Posts Tagged ‘Digital’

Making Tax Digital – a step closer

Thursday, March 16th, 2017

Another matter that received some clarification last week was the government’s move to implement MTD for the self-employed from April 2018.

When the scope of MTD was first published it was proposed that the self-employed (including unincorporated property businesses) would need to commence the quarterly upload of summarised accounts data, direct to HMRC’s digital accounts, from April 2018.

In the budget last week, a relaxation of this deadline was introduced. Only self-employed businesses with taxable income in excess of the current VAT registration limit (£85,000 for 2017-18) will be required to comply with MTD uploads from April 2018. Those with income below the VAT threshold will now have until April 2019 to comply.

Whilst this is a welcome reprieve for smaller businesses, none of the other regulations regarding MTD have been relaxed. In particular, the need to comply with the quarterly uploads if income exceeds £10,000.

It was hoped that government would increase this threshold as it does require very small businesses into a compliance regime that seems out of proportion with their size. For example, a self-employed person with taxable income of just over £10,000 will have to comply with MTD from April 2019 even though their personal tax allowance will eliminate any tax liability for the year.

Clearly, MTD is a major change in the assessment of tax, probably the most impactful since the introduction of self-assessment 20 years ago. Readers affected, should ensure that they are ready to comply and in particular have identified a suitable format for keeping their business records that will facilitate the electronic transfer of data to HMRC.

If you are unsure which software or process to use, please contact us, we can help.

A step closer to Making Tax Digital

Wednesday, February 8th, 2017

We have advised readers in previous postings that HMRC seem to be intent on digitising the upload of small business accounting data from April 2018. From this date, affected self-employed traders (including landlords) will be required to upload details of their trading activities on a quarterly basis.

On the 31 January, HMRC responded to the consultation with interested parties regarding the way in which the MTD process will work in practice.

Many of the initial features remain unchanged:

  • The self-employed will be required to file from April 2018.
  • The lower income limit above which filing will be compulsory remains at £10,000 – although we are likely to see an increase in this figure when the legislation enacting MTD is published in the Finance Bill March 2017.
  • Traders will need to keep their accounting records in a format that can be uploaded to HMRC. Hopefully, spreadsheet templates and other small business software will be available, but traders will need to ensure that they are organised and ready to comply by the April 2018 start date.

Once the MTD process is activated, the need to file a self-assessment tax return each year will be discontinued. It will be replaced by the four quarterly uploads and an annual final check to ensure that all relevant reliefs and adjustments to accounts data are in place.

This is a huge change in the reporting of information to HMRC. As the April 2018 date approaches we will be working with clients to ensure they are fit for purpose. More than 600 accounting software providers are working with HMRC to ensure that their software will accommodate the uploads to HMRC.

Clients who are concerned by this change and want advice on the implications for their business are welcome to call for an update. Please bear in mind, that until we see formal legislation on this topic later in the year the precise details of who is affected, and how the upload process will work in practice, are still uncertain. What seems to the case, is that we have moved a step closer to Making Tax Digital.

Making tax digital – nothing to worry about

Wednesday, November 16th, 2016

Readers will be relieved to note that their professional advisors and other interested organisations, have recently lobbied HMRC to temper their agenda for making tax digital (MTD).

In case you have not heard of MTD, HMRC intend to require businesses with income over a de minimis limit (presently set at £10,000), to upload summary accounting data on a quarterly basis from April 2018. The idea is to abolish the annual tax return and “push” all of the information that is required to work out our tax liability to our MTD account with HMRC.

This will involve all affected businesses (including those that let property) to keep their accounting records electronically, and more particularly, in a form that will allow data to be uploaded to HMRC.

Advisors have lobbied for an increase in the £10,000 limit, and a rethink on the quarterly upload of data.

The potential for lumbering small businesses and landlords with yet more red tape is one concern, as is the virtual enforcement of digitising accounting records – many clients prefer to use spreadsheets or manual record keeping.

A HMRC spokesperson, Jim Harra, published the following rebuttal in the Financial Times on 10 November:

HM Revenue & Customs will not be asking anyone to file accounts five times a year, nor will we be introducing in-year quarterly payments. Businesses will simply send in-year updates to HMRC using information collated automatically by the same software used to record day-to-day transactions. This will help businesses pay the right amount of tax, taking away the need to put things right at a later date.

Businesses already keeping their records digitally should see no additional costs at all. Free software will be there for businesses with the most straightforward affairs, and we are looking at additional assistance with transitional costs.

We fully recognise that this is a significant change for some businesses, which is why we’re introducing it gradually as well as exempting some of our smallest businesses, but at the heart of digital transformation is a simpler, more efficient tax system that frees business people from red tape and form-filling.

Based on past experiences of HMRC’s digitalisation of systems, there may well be delays in the implementation of MTD, but HMRC do seem to be resolute in their intention to scrap the annual tax return and have us upload data in order to quantify annual tax liabilities.

Going digital

Tuesday, August 23rd, 2016

The government have backed down from their proposal to dump a new raft of compliance activity (red tape) on smaller businesses. In their efforts to digitise each businesses’ records with HMRC it was intended that firms be required to keep their books and records online and update HMRC’s data quarterly.


Having consulted with various trade bodies, notably the FSB – Federation of Small Businesses – this requirement has been lifted; at least from the smaller firms. Here’s what the FSB and government sources have to say:

The Financial Secretary to the Treasury, Jane Ellison MP, said:

“We are committed to a transparent and accessible tax system fit for the digital age, and Making Tax Digital is at the heart of these plans. This new system will make the UK’s tax administration more efficient and straightforward, and will offer businesses greater clarity when it comes to paying their tax bills.

By replacing the annual tax return with simple, digital updates, businesses will be able to concentrate on putting people and profit, not paperwork, first.”

Mike Cherry, FSB National Chairman, said:

“Today’s announcement by the Financial Secretary to the Treasury Jane Ellison MP on quarterly tax reporting proposals is incredibly important. Together with the Chief Secretary David Gauke MP, we have seen real dialogue with the business community. The government has listened to FSB representations on behalf of small businesses up and down the UK.

Removing small firms and the self-employed with modest turnovers altogether from the proposals will now mean that in addition to the 1.6 million small businesses and landlords that were already excluded, as a result of these changes announced, a further 1.3 million small firms and landlords will no longer be in scope. This means that half of the UK’s 5.4 million small businesses will not be affected by quarterly tax reporting. The expansion of cash accounting, a longer lead-in time for implementation and the offer of direct financial assistance will also help.

FSB will be submitting new evidence into the consultations announced today, and look forward to working with the government and contributing to its Making Tax Digital agenda.”

Edward Troup, Executive Chair, HMRC, said:

“Making Tax Digital represents very significant change. It will bring the tax system into the 21st century and help make HMRC one of the most digitally-advanced tax administrations in the world. Going digital will abolish the annual tax return as we know it by 2020, replacing it with a personalised digital service through which taxpayers will be able to send and receive information to HMRC at the click of a button.

There is still a lot to design and develop, and it’s important that we do this hand-in-hand with our customers and their representatives; these consultations are the next step in this process.”

Seven Things You Need to do to Grow Your Business Online

Thursday, April 21st, 2016

In the digital age, there are many tools available that can help grow a business. Like everything else though, they need careful consideration and planning.

Here is some advice on seven things you need to do in order to help to grow your business online:

1. Carefully target your online audience
To a large extent, e-commerce depends on a reputable, accessible online presence. Identify your target demographic and ensure your marketing and content speaks directly to that audience.

2. Harness the power of social media
Most social media platforms are free to use and they provide many useful functions for businesses, including, a means of advertising, promoting brand awareness and building relationships with your customers. If you are short on time, pick maybe just a couple of platforms initially and manage them well, as quality is important if you want to build a following.

To help you to keep on track and be consistent, put together a simple content calendar so that you can plan when and what you will be posting. Then you need to ensure that you always analyse what happens and learn from it, i.e. what posts work, what posts get lots of attention, what posts send traffic to your website and, most importantly, what activities result in sales.

3. Invest in mobile compatibility
Increasingly consumers are using mobile devices for shopping. If this is applicable to your business you will need a robust mobile e-commerce platform. Solutions include responsive sites, mobile sites, apps, click-to-call tools, real-time notifications and maps. Your site needs to load quickly too, as a customer’s attention span will not wait for product descriptions and pictures to load – they will click off and look for the product elsewhere.

4. Provide high quality content
Put yourself in the position of your customer and ask yourself – what does my customer need to know? And then ensure that this is what you deliver. Useful infographics, ‘how to’ posts and videos, engaging and interesting pictures, polls and surveys and links that people want to share. If you are unable to do this yourself, delegate this to a member of staff or perhaps look to engage a copywriter.

5. Personalise content
Technology can generate shopping experiences that are based on personal preferences. BatchBook and Zoho are Customer Relationship Management (CRM) software solutions that small businesses can use.

6. Integrate your sales channels
All methods of shopping and interaction with your company should provide the customer with the same great experience. Promotions, offers, company information and mission statements, should be reflected in both your online presence and in your business premises. This will help to encourage customers who engage with you in the ‘real’ world, to begin to use you online too, and hopefully encourage their friends and contacts to do the same.

7. Look at subscriptions
Ask people to sign up for your newsletters/special offers emails. Newsletters can be populated with your high quality content (as recommended earlier) using a tool such as MailChimp and Mad Mimi.

You can send out special offers when you need to, for your business this may be seasonally. Ensure your offer emails have an engaging subject line, a call to action and a landing page on your website which corresponds exactly to that call to action.

Most newsletters and email distribution systems can provide you with statistics, so that you can analyse the response of your efforts, for example, which subjects are more popular and which links do people click on.

Botting and Co Chartered Certified Accountants can support your business from the start. Our business support services for business in Littlehampton, Bognor Regis, Chichester, Worthing, Goring by Sea, Rustington, East Preston, Arundel or West Sussex include business start-up and planning, raising business finance, strategic and financial planning, cash flow and profit forecasts, financial systems and exit planning. Contact us today on 01903 713508 or email

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