What is Making Tax Digital?

Understanding MTD and the story so far

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Making Tax Digital for Business

Making Tax Digital for Business (MTDfb) is a government initiative and it’s been put in place according to HM Revenue & Customs (HMRC) to make it easier for you and your clients to manage and pay taxes.

Ultimately, it’s designed to save the government money whilst providing you and your clients’ with an up-to-date view on your clients’ tax position. If handled correctly using an App, it will also save you and your clients’ time whilst helping them manage their finances properly.

What it will mean is that all professional practices will be required to make quarterly submissions to HMRC and will also result in significant changes to the way professional practices will interact with HMRC as digital reporting and digital tax accounts become a reality.

Over the past 18 months, MyFirmsApp has been working closely with HMRC to ensure that you remain the trusted advisor in this new digital and mobile world, and to provide you with a proven, compliant solution that’s simple, intuitive and easy to use, with everything required in one App, one place and in your brand.

This is combined with a roll-out support programme to ensure that all the on-boarding challenges and training of all your clients is fully automated and has full support in place to help and guide your business through the process peacefully and professionally.

The result? MTDfb isn’t something you have to worry about, instead you can turn your attention on how to turn this into a positive for your firm, your clients and your combined futures.

How will MTDfb work?

MTDfb will not require professional practices to file four tax returns every year. Instead, businesses will send summary data (either to a portal where you can review the data or direct to HMRC) about their business each quarter, or more often if the business prefers.

In our view, the very best way to get the summary data is to use a single App in your brand (we make the App look and feel like your creation, matching your branding and logo). An App that’s HMRC compliant and approved, that sits on their device (phone or tablet) in your brand, gathering all this critical summary data automatically, solving painlessly the challenge of digital record keeping, and removing the requirement for *Excel spreadsheets and the need to consistently chase clients for data.

One App, One Place, Your Brand

The summary data will consist of income and expenditure all gathered automatically in the App using tools designed for this task.

Income – The App will ensure that income can be managed, logged, tracked and automatically uploaded **pre HMRC integration for review.

Mileage – Will be tracked using state of the art GPS tracking technology, helping to save your clients time, increasing the accuracy of claims and reducing your workload.

Expenses – Manage expenses quickly and easily on the go; simply click, select, confirm and save. These expenses will then be uploaded for review.

* Excel spreadsheets are admissible (with additional software to meet requirements) but the App is easier to use, faster and more accurate than Excel due to far less room for user error. That being said, we appreciate that for some accountancy firms there may be a handful of clients who refuse to change their habits. The system has been built to handle this use a unique importer tool.

**The entire solution has been built to give you the power, control and data you need at your fingertips pre-HMRC integration. In the settings, you can select if you wish to use this or allow the summary data to automatically feed to HMRC and then you review once a year, or for you to review quarterly. Either way, all of this is in your brand and your name, meaning that your clients don’t go to HMRC direct and you remain the trusted advisor in this digital, mobile world.

Automatic monitoring and chasing of summary data

You know first hand how hard it is getting data, in an accurate format from clients once per year. So, it’s not surprising that we have heard many firms heave a big sigh when they hear it’s now quarterly! Because to them, it means facing that battle; that tough battle not just in January, but now 4 times a year. But then, that was all done the hard way - manually trying to get data from clients, manually being handed a carrier bag full of receipts, manually having to try and chase individual clients for missing information. Manual, labour intensive and almost always thankless hard work.

But the new way of working won’t be like this, we built it knowing the challenges that firms have faced. It’s been designed understanding that some clients will provide everything in a timely fashion but many won’t. So, using the very latest technology the App will monitor who has and hasn’t provided the summary data. It will automatically chase them using personal push notifications (which are 5 x more effective than emails) so that if something is missing they know about it.

Everything is automated, so that you can focus on what you do best and not having to deal with the worry and stress of chasing for the summary data.

When will Making Tax Digital start?

There is a detailed timeline in the MTD roadmap. Key events are:

  • On the current schedule, professional practices will be expected to update HMRC with business information at least quarterly from April 2019.
  • Reporting information is to be brought closer to real-time which is likely to mean submission of figures within one month of the quarter ends.

Bringing everything together in one central place