Moore Accountancy Update

We hope everyone has had a nice Summer break and are refreshed and revitalised for the coming quarter - we definitely are!

POONAM

We had a nice send off for Luke a few days ago, who after 2.5 years has decided to leave Moore Accountancy. His replacement Poonam Shah started on 01/09/22, and we are sure you will make her feel welcome!
Prior to joining Moore Accountancy she worked as a Bookkeeper, and will be focusing on Payroll, VAT returns and Software set ups.
In her free time  she enjoys walking and doing yoga with her young daughter as well as watching TV, with classics such as Friends being on the watchlist.


OTHER
Moore Accountancy continue with hybrid working, as it works with the team dynamics and their welfare, both mentally and physically. 

Emails will continue to be passed to the relevant team member and dealt with as if they were in the office.

If you have missed any of our previous newsletters, then our website has a backlog of them here.

Making Tax Digital (MTD) for Income Tax will apply to sole traders, property landlords and certain other businesses with gross turnover and/or property income over £10,000 a year and will commence in April 2024. The system will then be extended to partners from April 2025 and LLPs and partnerships with corporate members from April 2026.

The Income Tax (Digital Requirements) Regulations 2021, set out the requirements that relevant persons must comply with under MTD for Income Tax. These include the use of MTD-compatible software to keep and preserve their business records (income and expenses) digitally, send quarterly updates of their records to HMRC and submit an end-of-period statement to HMRC.

HMRC published draft notices of the detailed provisions for consultation in July. The consultation invites views on these which provide additional information on the key requirements of MTD as they relate to:

• The use of functional compatible software.
• The information required when submitting quarterly updates and end-of-period statements.
• Retail sales election.

The draft notices specify the proposed dataset requirement. Later in the year, HMRC will publish guidance to explain how customers can reflect any accounting and tax adjustments that may be required to reconcile the quarterly submissions to the final taxable profits for the year (The End of Period Statement). The consultation sets out the adjustments that are likely to be required, such as accruals, prepayments, private use adjustments, stock and capital allowances.
As expected, the breakdown of income and expenses broadly follows the headings on the self-employment and property income pages on the Self-Assessment Tax Return.
The consultation document states that where the annual turnover is below the VAT registration threshold, the individual may choose to provide the total of all income and the total of all expenses, instead of a detailed breakdown of expenses. This is also consistent with the self-employment pages in the Self-Assessment Tax Return.
Retail sales businesses may enter a single digital record of the daily gross takings for any retail sales made.
For details, see: Tertiary legislation for Making Tax Digital for Income Tax - GOV.UK (www.gov.uk)

Please talk to us about making sure your business complies with MTD. We are here to help!
 

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HMRC have also issued new guidance on the penalties that they impose for non- compliance with the Making Tax Digital (MTD) for VAT rues.

In particular, there is a penalty of up to £400 for every VAT return a business files without using ‘functional compatible software’. 
Functional compatible software means a software program, or set of software programs, products or applications that can:
•    record and store digital records
•    provide HMRC with information and VAT returns from the data held in those digital records
•    receive information from HMRC

There are additional penalties if the business does not keep their records digitally. 
HMRC may charge the business a penalty of between £5 to £15 for every day on which the digital record keeping requirement is not met. 

To meet the digital record keeping requirement, the business’ functional compatible software must contain:
•    the business name, address and VAT registration number
•    any adjustments from calculations made outside the functional compatible software for any VAT accounting schemes used
•    the VAT on goods and services supplied, meaning everything the business sold, leased, rented or hired (supplies made)
•    the VAT on goods and services received, meaning everything the business bought, leased, rented or hired (supplies received)
•    any adjustments made to a return
•    the ‘time of supply’ and ‘value of supply’ (value excluding VAT) for everything bought and sold
•    the rate of VAT charged on goods and services
•    details of any ‘reverse charge transactions’, where the business needs to record the VAT on the sale price and the purchase price of the goods and services bought
•    copies of documents that cover multiple transactions made on behalf of the business like those made by volunteers for charity fundraising, a third-party business or employees for expenses in petty cash

As all transactions must be contained in the functional compatible software there is not a requirement to scan or upload supporting documents, however we believe this is a step which makes the bookkeeping records complete.
 

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19/09/22 - PAYE & NIC deductions for month ended 05/09/22 (August payroll)

30/09/22 - Corporation tax due for year to 31/12/21

19/10/22 - PAYE & NIC deductions for month ended 05/10/22 (September payroll) 

31/10/22 - Corporation tax due for year to 31/01/22

31/10/22 - Filing for any Self Assessment Tax Returns via PAPER