Happy March people, I have mentioned the enormous changes coming to us in 2019 and of course bored you with the Making Tax Digital stuff, which has of course been pushed to the side in terms of column inches and news time because of impending Brexit “Deal or No Deal”. But guess what people, it is here.
Yes, in April the first digital submissions of VAT will take place.
“Well Gary I hear some of you say, I am a driver and not VAT registered so what is the big deal”?
The big deal is that if the VAT stuff is here, the income tax stuff is arriving soon after, so we all need to up our game! Don’t believe any accountant that says that they have all the answers. In order to make your working life pleasant, you need to understand what is happening and work with your accountant to get it right.
MTD is the digitisation of the tax system, and although it starts with VAT from April 2019. No one will be able to submit through HMRC’s direct online services but will have to use MTD compliant software. Put simply, everyone will be expected to keep their own records digitally when it is in force. Digital record keeping means, rather than having a bag of receipts, the record will now need to be kept in a digital software, such as Excel, Sage or Xero. Us accountants can help you to access any software and can even do it all for you, but into the software it must go. You can continue to keep your paper receipts and invoices but the HMRC won’t be interested unless they are investigating you!
For you VAT registered people, I have also mentioned before that since I am involved in both pilots and my practice was the first to submit an MTD VAT return, I have an idea of what’s coming. If you currently submit your own VAT return through the HMRC online services, you won’t be able to anymore. You need to get commercial software or get your accountant to do it for you. If you already use software (like sage or xero) make sure that your software is MTD compliant so that you can continue to submit. In many cases this means you will need to buy and or install bridging software, from your supplier. They should already be telling you this, since all software that is MTD compliant will be required to use application program interface (API), in order to send and receive information to HMRC. We will not be able to assist you unless this is in place.
Without wanting to sound like an advert, you need to speak to your accountant, and it seems you may need us guys for a while longer, or at least until we are replaced by robots. It is however your accountants’ job to understand, adopt and adapt to new legislation and support you. The investment in technology and cloud based solutions is also a game changer but we need to also be aware of increased cyber crime and making sure that us accountants and you clients all keep up together. It will need to be a team effort.
We all know the next big challenge; Brexit will be the biggest economic and social changes that most of us will go through in ground transport this year and probably for a few years to come. From a professional advisor’s perspective this reminds me of the millennium and the fears that people had that all computers will fail, and planes would fall out of the sky. In that case it didn’t happen, but our problem is that we don’t know what will. However, this is one of the things to think about.
For many chauffeur and executive circuit companies that do or get business outside of the UK, there may be tariffs or newly imposed tax regimes that they or their accountant may not have dealt with before. There may be new laws “made on the quick” to deal with this and we all (including the HMRC), need to keep up.
So, a new tax year of change and possible disruption from all sides. This is the year you will learn to love or loath your professional advisors, so good luck and never be afraid to ask those difficult questions.