11th January 2018
There’s never really a quiet time when you work for yourself – either you’re busy on contract projects or client work, or you’re out looking for the new business you need.
It’s worth putting some time aside over the New Year period though to get your head around the Making Tax Digital (MTD) initiative, so that you understand what it means for workers in your position.
There’s a lot of advice out there, so if it helps to talk to an accountant, you can call us at any time for a simple explanation of the new plans and how they may affect you. Some people, for example, may be exempt from the MTD requirements, which are all based around individuals making their tax returns digitally, and almost certainly reporting on a more frequent basis.
It may sound like some time away, but it’s sooner than you think. If your freelance or contractor business is VAT registered, you’ll be asked to report digitally from April 2019 – that’s just over 12 months away. This deadline will also apply if you are not VAT registered at the moment, but are likely to be by the time the regulations come into force. And don’t forget that the VAT threshold – currently at £85,000 – may also change between now and then.
For self-employed people who don’t pay VAT but do pay income tax, the start date is slightly further away. It is likely to be 2020, but there is no firm start date at the moment. However, it’s a good idea to start getting into the habit of recording the right things and managing your accounts in the right way. You will need to do this using one of many accounting software packages on the market – as long as it is MTD-compatible. Not only will this help you to keep a closer and more accurate track of what you’re earning and spending; it is also likely to save you time and hassle in the long run. Talk to us about how to choose the best software package for your business – we work with all packages, so you can export your data to us and we can prepare your accounts for you.
At the start of the New Year, you should be actively thinking about choosing a software package if you don’t already use one. Start to keep your records digitally and read up on the Making Tax Digital requirements. And of course, talk to us to see how we can help you to make this transition a smooth one rather than a scary one.