Business First May-June 2017 Business First May 2017 - Page 32

BEST PRACTICE Online Accountancy: Preparing your business for digital filing Chartered Accountants – M. B. McGrady & Co – is one of the largest and most-respected independent practices in Northern Ireland. With offices in Downpatrick, Belfast and Newtownards, M.B. McGrady & Co Chartered Accountants represents a diverse range of SMEs, family run businesses, agri businesses, charities and sole traders across Northern Ireland. rom April 2018, tax filing is going online, and businesses will have to report quarterly to HMRC. The solution is for businesses to keep track of their business records digitally and migrate their accounts to online accountancy software. This is a complete overhaul of the way tax payers will submit their records to HMRC and a lot of businesses, especially SMEs, have valid concerns about this change. This month, we meet Conaill McGrady, Director of M.B. McGrady & Co Chartered Accountants, for some expert advice on making tax digital (MTD) and how the M.B. McGrady team is helping business owners across Northern Ireland to prepare for the change. F What exactly is Making Tax Digital and why is it happening? Put simply, Making Tax Digital (MTD) is a government initiative to digitise the UK’s tax system, with the aim of making the whole process of administrating tax much simpler and more efficient. All of your tax information and interactions will be in one place, and you’ll be able to pay tax based on your business activity during the year, uploading or updating your tax accounting in real time. What is the timescale for rollout? Businesses, self­employed people and landlords will need to submit quarterly updates to HMRC and keep their records digitally by 2020, but this will be phased in. The current plan is to start quarterly reporting from April 2018 for landlords and self­employed, with micro businesses next to go online. We recognize that, as accountants, we have a huge role to play in simplifying this process for our clients and M. B. McGrady & Co is committed to helping clients to prepare for the change. We have already successfully implemented new digital accountancy software into many of our clients’ businesses, and even though April 2018 is around 12 months away, we’re recommending that business owners consider online software now to ensure a smooth transition when the new tax system is implemented. How will it affect businesses? If you own a business, you’re self­employed or you’re a landlord and you pay income tax, 30 www.businessfirstonline.co.uk national insurance, VAT or corporation tax then it’s very likely you’ll be affected. This means that you’ll be required to keep track of your tax affairs digitally using MTD compatible software, and to update HMRC at least quarterly via your personalised digital tax account. We believe that HMRC’s long term aim is to eliminate the annual tax return entirely, and this is the first major step in this process. With all major changes, preparation is key and the longer you have to prepare, the more prepared the business will be come April 2018. Digitising tax isn’t going to be a simple transaction for business at the outset, however by starting the process now, businesses will have the time to understand how the changes will affect them, implement digital systems and adjust business routines to ensure compliance. Essentially there are three main outcomes of Making Tax Digital: 1. Tax in real time Businesses will not have to wait until the end of the year or longer to know how much tax they should pay. HMRC will collect and process tax relevant information as close to real time as possible, to help prevent errors and stop tax­due or repayments­owed building up. 2. Tax in one place The Making Tax Digital project is all about )х́Ёɸ)ͥЁɕ͕аЁх́)͕ͥյ䁽ѡȁѥ́)ѥѱ́ѥЁѡɽ՝)ѡ́ɽ̰х́ݥѼ͕)ѡȁєɔ+ ЁѕɹЁ(̸%ѕɅѥхݥѠ!5I ) ͥ́ݹ́ݥѼѕɅ)ݥѠ!5I х䁅ЁѥѡЁե)ѡQхɕɐͽ݅ɔ)ѡЁѡ䁍͔Ѽ͔ݥ)ɕѱѼ!5I ѕ̰ݥ)ͥ́ݹ́Ѽ͕ɕٔ)ɵѥɕѱ䁙ɽѡȁͽ݅ɔ)45Ʌ䀘 ٕ́ѡЁ)͕̰ͥ٥ѡɥЁ)ͽ݅ɔݥɥѥѕɵ́)ɕɅѥȁ5Qѡéѡɕ)́ɔѼȁ՝ѥ́)٥́ѼݡЁ́ݥݽɬЁ)ͥ ݹ̸)5=I%9=I5Q%=8)ȁɔɵѥ͔)ѡ́Ё4)5Ʌ䀘 (ĀāȁхЁ٥)聥Ʌ乍լ