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We’ve all heard about the HMRC’s somewhat bold scheme to step taxes dramatically into the future, Making Tax Digital.
However, if you are anything like us you will likely have found that the literature online surrounding the topic is unsurprisingly vague. There’s plenty of talk about approved software, but how this approved software works or what using this software entails is apparently ignored.
This was quite frustrating for us as we set our sights on offering our users an easy way to become MTD compliant. We have, however, navigating through the swathes of (largely not very useful) information and are considering several solutions for our users.
What we thought might be helpful for you all is a quick no-nonsense rundown of what this whole Digital Tax thing means:
Or get advice from the professionals: TN Accountancy
The first draft of this article got a little technical at this point, and that was frankly no fun at all. I’ve stripped out the jargon and hopefully distilled into a more crystalline format what it means for software to be ‘HMRC approved’.
HMRC approved accountancy software needs to integrate with the HMRC. Once they have proved that they can do this integration they go through a demonstration and approval process with the HMRC.
What this integration does is allow the software to ‘talk’ directly with the HMRC meaning that with a click of a button within the app or desktop software you are using, you will be able to submit your quarterly and end-of-year tax return.
The real advantage of using a software like Landlord Studio that has both desktop and mobile software is that you can update your accounts anywhere at all with payments in, expenses out, and digitized receipts and keep your books up to date in real-time.
The idea behind MTD is to reduce human error, get rid of that big accountancy task at the end of the year, and create better transparency and understanding of your tax obligations. You will be able to simply review the accounting you’ve done as you go along, and then submit.
For most landlords, MTD isn’t something that they need to worry about yet.
However, it is coming in stages and will apply to all income tax by 2024.
Thankfully, if you are using Landlord Studio then that means you are already keeping digital records of your taxable income and expenses. You don’t need to do anything else at this time as we are currently working on becoming HMRC approved and will be ready before the 2024 deadline.
If you’re not yet keeping digital records now is a good time to start looking for solutions! You can try Landlord Studio free for 14 days to determine if it’s the right solution for your digital record-keeping needs.
* Free 14 day tria. No credit card required.
If you are currently required by the HMRC to submit your VAT return digitally then you will need to be using an approved accountancy software or bridging software to submit your taxes to the HMRC. You can find a list of approved software here.
We hope you found this blog interesting! However, do note that it should not be used as a substitute for competent legal and/or other advice from a licensed professional
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