Making Tax Digital is not far now...
There’s now less than a year to go until businesses above the VAT threshold will need to start keeping their accounting records digitally and submitting their VAT returns using MTD-compatible software.
An HMRC pilot has already begun, inviting certain businesses to get started on the scheme. Others, however, will need to start putting the work in now to ensure they are ready for the change. Here are some ways you can help your clients to prepare for April 2019.
- Conduct thorough reviews
It goes without saying that not all clients will be ready to make the switch at the same time. In order to plan for a smooth transition, it’s necessary to conduct a review of both your own systems and your clients’. Ensure that you have implemented the relevant measures to handle any extra reporting, data collection and workflow demands that may occur, and check that your own accounting and tax systems are compliant with MTD.
Next, review which clients are likely to be able to make the transition first. Look at their current infrastructure, processes and systems and discuss a schedule with them. As you get an idea of timeframes, you can plan how your business will assist each client through the various stages of transition.
- Create an Agent Services account
If you haven’t yet done so, now is the time to create an Agent Services account with HMRC. This will enable you to sign clients up to MTD and access their accounts on their behalf. All existing agent codes can be linked to the new account, so there’s no need for re-authorisation. Remember that when signing clients up, you’ll need to make them aware that from that point, they must keep their records digitally.
- Keep clients updated
HMRC is posting regularly on the subject of MTD, so it’s worth keeping up-to-date with the latest blogs and news. Where relevant, this can be fed back to clients; not only does this keep MTD and their responsibilities regarding it in their minds, it also helps them to understand the initiative and stay informed.
- Allow plenty of time for digital transition
Some clients may find the process of moving to digital record keeping challenging. As they become used to the new way of working, you’ll need to allow time for errors or questions, even extra training. When discussing the transition with clients, build in time for an increased workload on both sides before all parties become used to this form of accounting. In the long term, they should find that record keeping is easier and more effective – be patient and remind them of this if frustrations arise.
Digital accounting software
Finding the right software will be a bonus when it comes to moving to digital record keeping. Capium is an Online Accounting and Practice Management software designed to help accounting practices make their own business and their clients’ MTD compliant. To find out more, get started with Capium Bookkeeping and Payroll for free today. Click here to register.