April 2022 is not far away. Will you be MTD-compliant?
The roll-out of the UK Government’s Making Tax Digital (MTD) initiative has been delayed more than once, but the deadline by which ALL VAT-registered businesses need to be filing their accounts digitally with HMRC is still set at April 2022. That’s just over the horizon.
Can you continue using a paper-based system?
No, you cannot. If you wish to continue using a paper-based accounting system beyond April 2022, you will fall foul of HMRC’s MTD regulations. The bottom line is that some form of MTD-compliant software will have to be employed.
Which software should be used?
In principle, any software combination of spreadsheets and accounting packages can be used, but if spreadsheets are used the accounting package must be able to extract the relevant information from them electronically, in order to be sent on to HMRC without typographical errors being introduced by manually transcribing the data.
There are numerous desktop accounting packages available, which can be used to replace paper-based processes fairly quickly and easily. We would suggest speaking to an accountant who may be able to advise the best desktop package to suit your needs. It’s likely you will end up using a cloud-based accounting platform, which can provide you the freedom to access and manage your accounts wherever and whenever you wish – and should be MTD compliant as well.
If you are inclined to use a desktop package as your first step to move away from paper, then that’s a good start. However, it should be considered a short-term exercise, as the lifespan of many desktop accounting packages is questionable. Only recently, Intuit announced that they would not be launching a 2022 version of QuickBooks Desktop in the UK and would stop supporting desktop software after 31 January 2023.
Desktop accounting software vs. cloud platforms
In time, we believe it is likely that all the leading providers of desktop accounting packages will follow Intuit’s lead and will phase out their desktop products in favour of their online platforms, as the cost and logistics of supporting and updating multiple versions of desktop software becomes more and more uneconomical when compared to updating a single online platform.
What if you use a desktop package and want to move to the cloud?
Moving your accounting data from one of the popular desktop packages to a cloud platform is a breeze with Movemybooks. There’s no need to start again from scratch adding all your contacts, or spend hours inputting past years of data into a new accounting system. You can take up to 2 years of historic data with you (additional years can also be converted, up to a maximum of 12 extra years), and after converting with Movemybooks your customer and supplier details will be available to use, along with all your transactions. All the balances and reports will be fully populated with the data you would expect to see, allowing you to carry on working with the smallest possible interruption.
A conversion with Movemybooks is typically completed in just an hour or two, and they are often FREE – as Xero and Sage will cover your fees. There is a modest charge of £180 + VAT to convert to QuickBooks Online.