Making Tax Digital

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These changes apply to everyone including you: 

HM Revenue & Customs (HMRC) are making revolutionary changes to the tax system which will be launched in 2018. These changes are named Making Tax Digital (MTD). But what does Making Tax Digital mean for businesses and you?  In practical terms Making Tax Digital impacts on your business by requiring the mandatory keeping of digital records in a format acceptable to HMRC and the submission to HMRC of quarterly accounts figures.

What is it? 

  • HMRC is rolling out Digital Tax Accounts and with that, digital record keeping for businesses and landlords. The self-employed, companies and some individuals will need to submit details of income and expenditure on a quarterly basis plus a final year-end update.
  • New businesses will need to make a first return within four months of start-up.
  • MTD is intended to improve the accuracy of business records and minimise errors through the use of new technology.
  • At present, there are no plans to change the tax payment dates although a voluntary ‘pay as you go’ system will be introduced.

Who does it affect?

  • MTD will affect all businesses, including landlords; very few will be exempt. The main exemption will be for landlords and the self-employed with turnover below £10,000.
  • Some businesses may apply for an exemption on the grounds of insufficient internet infrastructure (however, HMRC expects this to be minimal), religion or medical conditions (these will be checked rather than accepted at face value).
  • Charities and community amateur sports clubs will also be exempt, but can voluntarily comply.

What does this mean? 

  • Businesses will have to submit details of their income and expenditure electronically on a quarterly basis, with a month to do this from the end of each quarter.
  • The quarterly updates and the year-end adjustments will be compulsory, and there will be penalties for non-compliance.
  • You will have to start keeping your accounting records and books digitally to allow the transfer of the data to HMRC in the prescribed format.
  • HMRC will not provide software; businesses will need to buy their own MTD compatible software. It is expected that free software will be available to the smallest businesses only.
  • MTD will apply for most unincorporated businesses and landlords for income tax and National Insurance from April 2018. There will be a one year delay for small businesses and landlords where the annual turnover is less than the VAT threshold.
  • MTD will apply from April 2019 for VAT and from April 2020 for corporation tax.

The Solution

  • The revolutionary changes to the tax system mean that the partners and staff of Saint & Co are actively involved in MTD, including attending courses to keep up-to-date with the latest HMRC legislation & guidelines. We are also working with our accounting software suppliers so that we can provide clients with the accounting package necessary to enable you to keep your ‘Digital Accounting Records’ as required by HMRC.
  • As yet HMRC have not issued the final definitive guide to MTD but we do have an outline of the new system. We will over the next year provide further information and discuss with you, the improvements or necessary changes required to your accounting systems and records so that you conform with HMRC requirements.
  • Should you wish to discuss MTD sooner then please do not hesitate to contact the partner looking after your affairs.

Tax

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5 ways Xero online accounting improves your business and gives you a better work/life balance

Lindsay Farrer, Partner, Carlisle Office
Lindsay Farrer, Partner, Carlisle Office

Time is a precious resource for business owners. Whether you’re a farmer, hotel owner or start-up entrepreneur, the less time you spend on financial admin the more you can focus on growing your business and building customer relationships.

But control over your financial management is also vital. Clear oversight of your revenues, costs, cash flow and profits is an absolute must.

So how do you reduce the time spent keying in receipts, while also getting an improved view of your finances?

The answer is to work with Saint & Co accountants to switch your financial management to Xero online accounting – the leading cloud accounting platform for small business owners.

5 key ways your life becomes better

Xero is accounting software, based in the cloud. It works just like the desktop-based accounting systems you’re used to, but without any of the limitations – with Xero, you can work with your business numbers 24/7.

Xero brings you all these key benefits:

  1. Instant, mobile access to your key numbers, straight from your laptop, tablet or smartphone.
  2. Easier ways to collaborate with your accountants and improve the proactive business advice you receive.
  3. Less time spent on paperwork, using a smart-scanning app such as Receipt Bank to automate your bookkeeping.
  4. A faster way to get paid and improve cash flow, using online email invoicing, modern payment gateways and automated debtor chasing.
  5. Integration with a range of business tools, designed to improve your business and give you back time to live your life well.

Saint & Co: your trusted Xero partner

At Saint & Co, we’re proud of our century-old heritage as accountants in the Cumbrian community. But we’re also a forward-thinking firm, always using cutting-edge financial technology to help our clients do more.

Our trained Xero specialists will help you seamlessly make the switch to cloud accounting. Once you see the impact on your time and profitability, you’ll wonder how you managed your business without the help of Xero.

If you want more from your business and work/life balance, contact us to arrange a hands-on demo of Xero’s beautiful accounting software.

Call Saint & Co on 01228 534371  or email us at advice@saint.co.uk to book a Xero demo and start the next chapter in your business success.

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Are monthly figures enough for your hotel business?

hotel room keys at reseption desk counter

Luca Pacioli, the Franciscan friar and mathematician who created double-entry bookkeeping, said, “Frequent accounting makes for long friendships”. And this saying is equally as important in the 21st century as it was back in 1493.

If you’re looking to run a successful hotel or guesthouse, it is vital that your finances are properly monitored and controlled – and that applies whether you are a small Guest House or a large hotel. Poor financial management is a major factor of failure. And the best way to avoid financial failure is to have an up-to-date view of your accounts, your business information and the health of your hotel company.

… Read more →

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4 critical decisions to make before starting a new business

Portrait of child businessman with suitcase. Start up business concept

Starting your own business is an exciting time for any business owner or entrepreneur. But before you dive headfirst into establishing your fledgling company it’s important to do some planning to make sure your new venture is built on the most solid of foundations – and that means asking yourself some critical questions about your business idea.

… Read more →

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Using your accounts to drive business decisions 

Picturesque landscape scene and sunrise above road

 

As a business owner, you may view your accounts as the end point of the financial process – a scorecard that shows your yearly or monthly profits, or a document that puts a full stop on the financial year.

But, in fact, the numbers in your accounts are an incredibly informative and useful pool of information regarding the health, efficiency and potential future success of your business.

… Read more →

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