The Locksmith Journal Nov/Dec 2018 - Issue 59 | Page 87

BUSINESSSUPPORT • 87 PROUD SPONSORS OF THIS PAGE awareness had actually dropped from 2017 to 2018, probably because of the delays. Only 15% knew about MTD. All this is probably because HMRC have been poor at communicating MTD. And with several deadlines already slipped, the accountants that do know about it are loathed to tell their clients until they are 100% sure of no further slippage. THE IMPACT ON LOCKSMITHS Despite the likely slow start in enforcement, all self-employed and business-owning locksmiths will eventually have to comply with fines and the big stick. There has been a lot of discussion, particularly among accountants, of how compliance can be achieved. As a result of pressure from the accounting profession, HMRC has changed some of the guidance, particularly in relation to spreadsheets. The bottom line for locksmithss is that records of sales and purchases must be kept in electronic form from April 2019 for those turning over more than £85,000 and from April 2020 for those turning over more than £10,000. VAT returns and quarterly profit and loss statements must be derived directly from these electronic records and submitted electronically to HMRC. HOW TO COMPLY There are three ways locksmiths can comply: • Send information regularly to their accountant who acts as their agent and records the information in their accounting system and performs the submission to HMRC. • Record all sales and purchases in a spreadsheet where the VAT return is calculated and submit these totals via ‘bridging software’ to HMRC. Use the same method for profit and loss returns in 2020. There is a rumour that this method will only be allowed for 12 months. • Run a system of their choosing to generate and capture sales and supplier invoices and submit electronically to HMRC from there. MOVING TO DIGITAL Already 98% of VAT returns are submitted through the internet either directly by the business or by their accountant. However currently only 8% of VAT registered businesses use their own accounting software to file their VAT returns. There are some reasons why moving to a digital platform can be good for locksmiths: • If all information is generated from a system, many things like quotes and invoices can be done faster and numbers are always up to date. That should save time, help chase any debt as well as manage the business. • Once people are familiar with a system, there is less work and cost than doing it manually. That’s why computers are so prevalent in so many businesses. • The paperwork can look more professional. There are some potential issues for locksmiths with adopting software: • A lack of familiarity with new software may create issues. • There is a possibility they will be dropped in the deep end with no support. • Additional cost. The way to address these issues is: • It’s important that lockmsiths receive a full demonstration of any software they plan to use so that they can see LOCKSMITHJOURNAL.CO.UK | NOV/DEC 2018 Sponsored by ABUS for themselves how difficult or easy it is. • Talk to other users to hear what their experience is. • Choose a supplier that provides excellent support and specialises in the trade industry. • As a result, weigh up the cost versus the benefits that should accrue. MTD VERSUS GDPR Both MTD and GDPR are supported by the law. The difference between the two is the need to do something specific to comply with MTD and the targeted fines for those that fail to comply. So, there is a distinct difference. Having said that, for anyone not VAT registered, implementation is some time away. Also, HMRC seem to be promising that enforcement will be gentle, at least initially. My hope is that this article will help with your planning and I would like to wish you good luck. Benjamin Dyer is the CEO of Powered Now. Powered Now aims to take the pain out of admin and paperwork for locksmiths and other trade businesses like installers, plasterers, roofers and many more. www.powerednow.com