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Making Tax Digital - non-compliance

Making Tax Digital - non-compliance
Thursday, February 21, 2019

It’s not quite the same as the excitement and anticipation you feel in the countdown to your birthday or to Christmas Day. The countdown to Making Tax Digital isn’t exactly tinged with the same degree of positivity as these annual extravaganzas but you can consider yourself officially part of this mass participation event if you’re VAT registered and your turnover exceeds £85,000.

You’re officially part of it whether you want to be or not. By the 1st of April 2019, you must be compliant with Making Tax Digital because the last thing you need right now is the taxman giving you a Secret Santa present in the form of a brown envelope containing a paying-in slip with a large number pre-written into it.

Today, the Panthera team look at Making Tax Digital and how to be compliant on time.

What is MTD compliance?

MTD compliance is the ability for your business to keep accounting records in a digital form and using these records to submit your VAT returns on time. Other taxes, including income tax and corporation tax, will eventually migrate to the MTD system but not just yet – April 2020 is currently the favoured date but it has not been confirmed yet by HMRC or the Chancellor..

Unlike the current system, the level of detail required for an MTD-compliant VAT return is much greater and your software has to be ready for the new system by 1st April 2019.

If you’re under the VAT threshold, you have another year to get ready.

What if 1st April comes and I’m not compliant?

From 1st April, every time you submit a VAT return, you must use accounting and bookkeeping software which conforms to the new MTD standard. The VAT site you currently report to will disappear. If you try to log on to the new site using software that is not MTD-ready, you won’t be able to file your return and this will leave you subject to a late filing penalty.

The software I use is bespoke and not compliant – what should I do?

Ideally, you should update your software. Many modern online bookkeeping and accounting packages allow the import of data from older systems however not all do.

It’s worth checking this now because you may have to bring in an IT contractor to help you with it. Unfortunately, if this is the case for your business, HMRC will not compensate you for the contractor’s time.

Does the VAT penalty system change after MTD comes into effect?

Yes – and this was the subject of heated debate between HMRC and the accounting profession during 2018. The accounting profession favoured one system and I am sure you can guess what comes next – HMRC chose to ignore our opinion.

The £100 fine has gone. The percentage-based surcharge has also gone. Fines imposed on companies will be based upon a brand new points-based system. If you submit your VAT annually, you get 2 penalty points for missing the deadline for submission. Businesses paying quarterly will be fined 4 points and those paying monthly will receive 5 points.

Points stay on your record for 24 months after which they drop off. HMRC have not yet announced the size of the penalties they wish to impose but you should expect them to be, in their words, “set at a higher rate…but unlike the current penalty regime, there will be no escalation to daily or tax-geared penalties”.

This new system will be introduced from 1st April 2020 – until then, the current system applies.

Be MTD ready with Panthera

There’s a few weeks to go now – we’ll already have been in touch with you about this. If you haven’t had the time to respond, we understand – you’re busy enough. If that’s you, we implore you not to hold off any longer.

To become MTD compliant with Panthera, please call 01235 768 561 or email enquiries@pantheraaccounting.com.

What our clients say

For us, there is nothing better than a happy customer. Here are just a few that let us know how much we mean to them.

Pete Dungey

Simple, efficient and most importantly, hassle-free.

We found Panthera via our search for a Xero expert. We knew the software we wanted to use, and needed a forward-thinking accountancy partner who could get us up and running, and teach us the ropes moving forward. Tory and her team have always been on hand to answer our questions, and help us to grow as a business, particularly during periods of big change, such as becoming VAT registered. They are always on hand to alleviate any concerns and help to keep our records in order, which makes our year-end accounts an absolute breeze! Being based in Bristol, our relationship is entirely email based, alongside one consolidation meeting at year end - this keeps things simple, efficient and most importantly, hassle-free.

Pete Dungey Kaleido Grafik Limited
Anita van Eijndhoven

Talk Our Language

The support and service we receive from Panthera Accounting is very good. Everything from regular meetings, a prompt e mail response and the transition of our Xero software (which we find very pro active indeed) has and is all remarkably efficient. We find Panthera talk our language and make any process as painless and easy as possible.

Anita van Eijndhoven Quidne-IT
Ash & Tim Lane

Panthera brush aside the stereotype of the typical accountant

We got in touch with Panthera Accounting by way of a recommendation; we haven't looked anywhere else since. They are an extremely professional yet relaxed group of people. We were slightly daunted by the idea of accountants but Panthera brushed aside y the stereotypes. They are very understanding when answering any questions we may have. They are completely efficient, offer sound business advice, and are fantastically priced. We will continue to recommend them.

Ash & Tim Lane Starveacre Fencing
Jayne Johnson

An Asset to my Business!

The whole team at Panthera are great! Working with them has been a huge support to my growing business. They help me to understand the numbers I need to know. They give me technology solutions like Xero so that I can process things quickly and have access to my own figures. They are quick to reply, highly knowledgeable, nothing is too much trouble and as well as making sure that everything is compliant and on time, they are enthusiastic, professional and fun to work with.

Jayne Johnson Better People
John Baker

Absolute joy - they provide a first class service on every level

Working with Tory and the team at Panthera is an absolute joy - they provide a first class service on every level; from simple Xero issues through to more complicated tax enquiries, they’re always on-hand to help me get it right. I’m certainly not their biggest customer, but I’m always made to feel like their most important one.

John Baker BKR Solutions
John Castle

Professional and Friendly

I would like to say that Panthera Accounting have helped me with my business accounts for more than 4 years now. They have consistently offered an excellent competitively priced service that works both professionally and in such a friendly way that I would highly recommend them to everyone considering using their services.

John Castle Ilexanna Limited & Birch Castle Homes Limited
Jonathan Morrison

They are always there to answer queries and sort out issues

I had been with Mr Dunn for 20 years when upon his death Panthera took over the business. They now play a bigger part in the running of my business, they do all the stuff that has to be done but I don't like doing ie book keeping, VAT, wages, and returns. They are always there to answer queries and sort out issues and make sure all Tax deadlines are met. Their costs are fair, service is great and I have and would highly recommend them.

Jonathan Morrison Wallingford Builders
Pippa Scott

Professional, friendly and personal service.

Panthera Accounting have gone above and beyond the call of duty to guide and support our Company. They offer a professional, friendly and personal service that can take the stressful and sometimes frightening feelings out of running a business. They have guided us through the working of Xero and have offered “teaching sessions” on the day to day running of the accountancy package. Our only regret is that we didn’t join their team earlier.

Pippa Scott Scott's Commercial Services Limited
Sara Southey

Panthera puts the personal back in to accountancy!

Tory and her team have provided a friendly, approachable and helpful service from the start. They have delivered a quality service, above and beyond anything I could have expected. Panthera, with the help of the Xero package, have taken the stress, strain and confusion out of managing my company and personal accounts. I look forward to working with them for many years to come.

Sara Southey Bluestones Garden Design
Tracey Miller

Panthera are fantastic.

Panthera are fantastic. Always professional, going the extra mile for their clients and delivering superb service. I recommend them all the time to my clients.

Tracey Miller Bigger, Brighter, Bolder BBB

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