What you actually need to do for Making Tax Digital
We’ve teamed up with Mazuma, our accountancy partner, to make Making Tax Digital easier to understand. This article is general information only, so please speak to a qualified accountant if you need advice about your own tax position.
Beneath the headlines, the practical to-do list is fairly short. There are three habits to get right, and then one decision to make.
Three habits to sort
1. Your record keeping. Keep digital records of your income and expenses as you go, rather than in a shoebox.
2. How you invoice. Send proper digital invoices. A WhatsApp message asking for payment no longer does the job.
3. How you capture expenses. Snap a photo of each receipt as you get it. Plenty of apps do this and it satisfies the rules.
The decision: software or accountant?
If you enjoy this sort of thing and have the time, choose a piece of MTD-compatible software from HMRC's approved list and do it yourself. You cannot use a spreadsheet on its own or the old HMRC online service, so the software has to be the recognised kind.
If you would rather spend your time elsewhere, hand it to an accountant. They handle the record keeping, the quarterly updates and the year-end, and they keep an eye on what you can claim along the way. A sensible middle path is to use software yourself and have a professional cast an eye over it once a quarter.
The time argument
Think about your own hourly rate. The hours you spend wrestling with submissions are hours you are not spending on the work you are good at, and the work that actually brings money in. For a lot of trades and sole traders, paying a professional to handle tax is the cheaper option once you count the time.
This is where Mazuma comes in. Mazuma is a subscription accountancy service built for exactly this kind of business. For a fixed monthly fee, the quarterly updates are handled, the year-end is handled, and there is a qualified accountant on hand when you need one.
Public and Employers’ Liability Insurance Explained
Key differences between the two:
Covers injury or damage to the public.
Covers injury or illness to employees.
Not legally required.
Legally required with staff.
Common for customer-facing businesses.
Required for any business with staff.