Digital Accounting for sole traders and landlordsWhat you need to know to be ready for digital tax
VAT registered businesses have been grappling with Making Tax Digital (MTD) since 2019. The next roll-out will be the introduction of MTD for income tax. This means many sole traders and landlords will need to keep their accounting records in a digital format.
What even is Making Tax Digital?
MTD is a government initiative that requires business owners and individuals to keep digital accounting records and file their taxes via an HMRC approved digital software.
Why digital accounting is important for landlords and sole traders
Although MTD has been pushed back, nothing has changed when it comes to the immediate benefits of going digital. We’re strongly encouraging landlords and sole traders to make the switch to MTD compliance now. Preparing for MTD isn’t just an early box-tick or being keen; it will positively impact the day-to-day running of your business and make your life easier. Here is more about the benefits of digital accounting for you.
How does this affect me?
There’s no doubt that, whenever it comes, MTD is set to be the biggest change to taxation in a generation. With all the confusion out there, our highlights of what MTD means for you are:
Making Tax Digital means you will now
need to store digital records in compatible software like Xero.
Multiple returns per year
HRMC will now require filing more than once per year.
A seamless experience
If you’re using MTD ready software, everything will be right at your fingertips and available at the push of the button. We like the sound of that!
Getting set up with MTD-friendly software is the key
There are a number of MTD-compliant accounting software packages and some relatively cheap packages specifically designed for property rental businesses. We’re evaluating all options for Sole Traders and Landlords so we can advise you on the best software for your business. The options we’ve decided on already are below, and we’ll be adding to that list.
We'll be here to help
Getting set up with a good digital accounting software will prepare you for needing to file six tax returns per year.
We'll provide the user-friendly software for you.
How can Tyrrell Accountants help you get there?
We'll just provide the software for you, but you'll run it going forward.
We get you the software, and you'll run it, but you'll get additional support and oversight.
If you're uncomfortable using the software, we'll do everything for you.
Determine the right software for you.
Determine the level of support you need
Go digital and be confident your finances are up-to-date
We were comfortable with the systems we were using and a little apprehensive about moving across to new software. Tyrrell Accountants supported us throughout the whole process which made for a smooth, straight forward transition. Digitalisation and the move to Xero has improved the accounting function of the business and a change that we are glad we made.
- Andy Wright – Director, Impington Roofing Services Ltd
Here are the software options we recommend
This will be most helpful for landlords
If you don’t have a dedicated business account, this is for you
Probably most relevant for larger businesses
If you’re a small sole trader looking for a low-cost solution
Current information about Making Tax Digital
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