Tag Archive | "making tax digital"

“Ready, Steady, Go!” – MTD is Live

On April 1st HMRC made MTD (Making Tax Digital) Live. This wasn’t an April Fools joke, it was finally here, and contractors couldn’t believe it.

It seems like MTD has been talked about for years. Almost like a myth or a legend, and contractors wondered if it would ever see the light of day.

Well, at the time of writing it is now 11:18am on 2nd April 2019, and here at Contractor Accountants we can confirm that MTD is Live.

That means if you are a VAT registered business in the UK and you make over £85,000 a year, then you MUST be registered for MTD.

“Don’t delay…do it today,” is our advice.

There are 1.2million businesses in the UK who are now subjected to MTD, and over the next few years it is expected everyone will have to call themselves a MTD contractor, freelancer, gig worker, or business owner.

In other words, if you are a contractor then you should get your making tax digital affairs in order and make sure you are legal.

The best way to do this is by hiring a contractor accountant and letting them setup your MTD account. They will do it on your behalf and without you having to lift a finger.

Our very own contractor accountants are experts in all things MTD. These are the best contractor accountants in the UK, and you can find them right here on this very website. Take a look and you will find them.

Back to the MTD launch and it is estimated that 100,000 businesses are already signed up to the MTD platform, with a further 4000 businesses a day joining.

Over the next 12 months HMRC will be giving businesses a gentle nudge to get them signed up and then a nudge will turn into a light slap.

Eventually it will be against the law to NOT be signed up for MTD…but for now HMRC are taking the soft approach.

Make no mistake about it. You will be prosecuted by HMRC if you don’t sign up and become Making Tax Digital Registered. Not now, but eventually…yes.

Not all contractors are in in favour of MTD, and if you remember, there was a lot of debate on the subject right here on the CA blog many moons ago.

A lot of our faithful readers wrote in and “Raged Against MTD,” calling it “ludicrus” and “a waste of space.”

Many others thought it was going to be a “major hassle,” and to “cost them more money.”

Eventually, some contractors started to warm to the idea of MTD. Let’s wait to see what happens, shall we.

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Making Tax Digital for VAT – Get Your Pilots License

You’ve heard us talk about Making Tax Digital many times right here on this blog. “Will it…Won’t it?” We have pondered many times.

Well, it appears that Making Tax Digital has been awarded the Green Light and all systems are go.

More specifically, it is the Making Tax Digital for VAT which has just been launched as a Pilot Version, with plans for it to become fully functional in April of next year.

The good news is that you can get your Pilots License from HMRC and take their new Pilot for a spin and see if it meets your standards.

If it doesn’t, then HMRC want to hear about it. No doubt there are still going to be a few gremlins in the system, which means they need Pilots such as yourself to really put the system through its paces.

To qualify for Making Tax Digital for VAT (Pilot Version) you should be registered for VAT and have a turnover of 85,000 pounds or above. If you meet this criteria then you are all set to start using the Making Tax Digital software.

According to HMRC, this whole Making Tax Digital thing will make it as easy as pie for businesses and self employed people around the country to get their taxes done, on time, each and every year.

This includes contractors and freelancers of course. And if you are a contractor making over £85,000 a year and you are registered for VAT, then you should also get your Pilots License and give Making Tax Digital for VAT a try.

Or you could just let your contractor accountant handle the whole thing. They have a Master Pilots License. There is no doubt about that. If they flew a real plane then it would be a luxury private jet fit for a King or Queen.

Don’t just let any old accountant handle your Making Tax Digital affairs. Most accountants are like the Pilots that fly budget airlines such as Easy jet and Ryan Air. Sure, they are not bad Pilots…but they are nothing compared to the Elite.

Our very own contractor accountants are the elite…you can take our word on that one.

So what are you waiting for? It’s expected that around half a million businesses and self employed people will eventually get signed up for the Making Tax Digital for VAT party. And once the system is ironed out then it should be easier than ever before to file your taxes.

Gone are the days of filling out forms and then sending it in the post. Have you seen the prices of stamps these days anyway?

Say hello to the new era…the Making Tax Digital era…where all you need is a computer, internet connection and…a contractor accountant.

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Making Tax Digital Makes a Comeback

We all thought making tax digital had been shelved. Officials at HMRC had apparently “pulled the plug” on the idea.

To be honest, most contractors were happy at the news. They didn’t like the idea of filing a tax return 4 times a year…even if it was online.

Well, get ready to be shocked, because word on the street is that making tax digital is making a comeback.

Yes you read that right. While the millions of contractors and self employed of our nation assumed MTD had gone the way of the dinosaurs, it appears HMRC were working behind the scenes, in a secret lab in a undisclosed location, in order to bring back the idea of a quarterly tax return online.

In fact, if recent reports are to be trusted then HMRC already have 35 software suppliers who are chomping at the bit to get this thing “LIVE” and “PUBLIC.”

Not only that, but 18 small businesses have completed a round of testing of the software, and they say everything is almost ready to launch.

When exactly? Next April according to insider sources, where high income contractors will be expected to report their earnings on a quarterly basis.

Hang on a minute. Have we not heard this one before? I seem to remember reporting a few times about how MTD was getting ready to launch…only to have the rug pulled out from under us all at the last minute.

It got shelved so quietly that many pundits wondered if it would ever see the light of day again. Well, here we are once again and yes, the light of day is about to be seen.

If it really is a GREEN LIGHT on project MTD then we can expect chaos in the contracting world.

As I mentioned earlier, most contractors were luke warm at best on the idea of doing a tax return 4 times a year, and there were some who just downright disliked the idea.

Also, let’s not forget that it requires digital financial records to be kept if you have to file your tax returns online, and in my opinion, this is sure to ignite mayhem and confusion among those contractors who try to go it alone.

The solution? A contractor accountant of course…who else? Nobody.

If you have a contractor accountant in your corner then they can become your go-to expert on all things “making tax digital.”

You can even hand everything over to them and allow them to wave their magic wand and get everything setup for you.

You might not agree with MTD…but you can make it a lot easier with a contractor accountant.

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Government Scrap Plans to Make Tax Digital

Just when you thought things couldn’t get any more crazy over there at government HQ, well this week they did, after a shock announcement.

Regular readers of this blog will be only too aware of the “Making Tax Digital” scheme that has been in the works for months now, and how when it came into play then contractors would have to do an online tax return 4 times a year instead of once.

Some contractors liked the idea, while others thought it was stupid. Personally, I can see both the pros and cons, and was at least ready to give it a chance.

Well, it seems that it probably won’t be happening after all, at least not anytime soon, as the government now appear to have lost interest in the idea.

That’s right. After spending millions of pounds and hiring some of the top financial experts in the country, and then using up thousands of hours worth of working time (that could have been spent elsewhere of course), they have now decided that making tax digital just isn’t worth it. That is what it looks like anyway.

Many pundits were expecting the making tax digital scheme to be included in a recent Bill that would have to pass through Parliament. Once accepted, it would have become law, with many people expecting it to be introduced in 2018, before being introduced to all self employed workers by 2020.

However, when the Bill was handed into reception at Parliament, much to the surprise of many politicians in the building that day, there was no mention of making tax digital. Maybe there had been a mistake? This is what some people thought, but it doesn’t look that way.

Underground sources have gone on to confirm that the government have basically given up on the idea, for now at least, and that is why we probably won’t be doing a tax return 4 times a year any time soon.

Some claim that the upcoming general election has something to do with it, while others have mentioned that it just wasn’t a very popular idea all around, both with government staff and the self employed.

I’ve been getting many contractors sending me emails over the last year or two, basically saying they were not looking forward to making tax digital and having to send in a tax return quarterly While I could see where they were coming from, my answer was always the same…”give it a chance.”

It now looks like we won’t get to give it a chance, although who knows exactly what is going to happen. The government might do yet another U-Turn, or even come out with something completely new.

The one thing that I do know is that every contractor out there should have a good accountant, no matter if you have to send in 1 or 4 tax returns a year.

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