When people hear that HMRC has changed the tax rules, it normally causes them to groan. But this time, HMRC’s plans could help small businesses as its Making Tax Digital (MTD) programme becomes a reality.
With Foxley Kingham’s new accounting solution for small businesses, we can make this major change in taxation smoother for our affected clients – one-man bands and sub-contractors who typically sit under the VAT threshold and up until now, have kept paper records.
Our new service
We have developed a new service for small businesses that will deliver a comprehensive accounting service at an effective price, while complying with HMRC’s new rules. Using cloud-based Xero software from start to finish, we have designed the process to be more efficient for our clients – everything is done on Xero and no other software is used.
We looked at how we could price this in a simple and easy-to-follow set fee structure that delivers what our clients need at the best value possible – to give our clients exactly what they need, and nothing more than necessary for compliance and getting your tax returns right first time round. You will only pay for the service that you need.
A leader in its field
The research firm, Kantar, described MTD as a “key part of HMRC’s ambition to become one of the most digitally advanced tax administrations in the world.” MTD first came into being in April 2019 when HMRC required most VAT-registered businesses with taxable turnover above the VAT threshold – over £85,000 – to keep records digitally and file their VAT returns directly.
HMRC had planned to start MTD for Income Tax Self-Assessment (MTD for ITSA) from April 2024 but then delayed this. It will now come into effect for sole traders and landlords earning over £50,000 from April 2026. And for those earning over £30,000, a year later. MTD for ITSA will require individuals to report their income and expenditure every quarter rather than just annually as they do today.
The benefit to our clients
We will take your accounts from transaction level to final filing so you don’t have to worry about your accounts. Xero means that all clients need to do is to take a picture of a receipt in our App and we will work with the software to do the rest – our experts are on hand should any queries arise. Clients can even throw the original paper receipts away as the images are saved securely in the Cloud.
Xero brings a suite of comprehensive services for clients covering the whole lifecycle of accounts: as well as the HMRC return submission, it delivers full bookkeeping and payroll, can be used to produce a quarterly report pack, and file annual accounts.
Keeping our clients ahead of the competition
Removing all this paperwork and Excel juggling will give you more time to focus on your business so that you can stay ahead of the competition – all while we manage the back-office accounts for you efficiently and seamlessly.
The service will also deliver more accurate reporting – both for your business and also for HMRC – so that you can have greater confidence in your numbers and know that your business decisions have a firmer foundation.
Xero will keep track of what money is going in and out of your business, monitoring income and costs closely. This will help project what your tax bill could look like to avoid any nasty surprises when the HMRC deadline approaches.
Although MTD is under three years away, that time will fly. Just witness how the past three years have gone – and how Covid-19 has transformed the way we work. Getting MTD-ready now will save time in the years to come so that you have greater headspace to run your business and focus on its future success.
How can we help?
Foxley Kingham can deliver a cost-effective accounting solution that improves the performance of your small business with better management information while complying with the new HMRC rules on MTD for ITSA.
If you are intrigued to see what this would cost you, try our fee builder and speak to our experts, and allow them to give you a free personal tour of what we can do to transform your business.