Rather a lot seems to have been happening recently and I've got a bit sidetracked from blogging. However, as I'm currently sofa-locked with a poorly pup asleep on me, I thought I would share a few thoughts on HMRC's upcoming Making Tax Digital initiative.
1). It's all gone a bit quiet.
The only people I've seen speaking about making tax digital (MTD for short) are other accountants. Wherever HMRC are advertising it, it is not front and centre. Given that it will significantly impact on any business that is VAT registered from May next year this is a little bit of a worry.
2). You WILL need to invest in some software and HMRC will NOT tell you which ones they like.
Whilst this is understandable, it is somewhat frustrating. There is a list on the website but it's in alphabetical order (which I think Xero are furious about!) Anyone using cloud based software already SHOULD be ok, but I'd suggest you double check if yours is compatible. If you're VAT registered and still using spreadsheets or a desktop accounting system, you should really start changing over ASAP to make sure you know what you're doing ahead of time. The transfer of data from one system to another is usually the trickiest bit so don't try and do it in a rush at the last minute!
3). I'm still not quite clear what HMRC are going to do with all this data when they have it. It all feels a little "big brother", slightly insulting for us in the middle (i.e. they don't trust us to submit things correctly) and a big old faff with the majority of cost pushed out to increasingly squeezed business owners. Humbug.
Will post more when I'm not typing on my phone! Any questions on MTD do get in touch.
(Esme has had an operation on her hurty leg and is in recovery for the next six weeks. We're hoping she'll be back to her usual self soon - especially as she's about to get a little brother!!! Squeee!)