Making Tax Digital isn’t just about sending your accountant a list of figures every few months.
As businesses and landlords get used to MTD, there is still some confusion about what being MTD compliant actually means. Sending your accountant a list of expenses, a bundle of receipts or paperwork once a quarter does not necessarily mean your record-keeping meets the MTD requirements.
What does MTD actually require?
A key part of MTD is keeping your business records digitally and up to date throughout the year.
This includes records of:
- Business income and expenses
- Bank and cash transactions, where applicable
- Dates and details of transactions
- Supporting records such as receipts and invoices
Is a list of expenses enough?
Simply providing a list of expenses to your accountant is not enough to meet the digital record-keeping requirements.
For example, you might provide your accountant with a list such as:
- Fuel – £50
- Materials – £120
- Telephone – £35
While this may help your accountant prepare your quarterly submission, it is not the same as maintaining your digital records throughout the year. You should keep digital records showing the relevant details of each transaction, together with supporting evidence such as receipts and invoices where applicable.
How can you keep your records?
A simple spreadsheet can be an effective way of recording your transactions, for example:
Date – Description – Income – Expense
Alternatively, using a separate bank account for your business can make keeping digital records much easier by providing a clear record of your business transactions.
The key takeaway
MTD isn’t simply about submitting figures four times a year. It’s about keeping your business records digitally, accurately and up to date throughout the year.
If you’re unsure whether your current record-keeping meets the MTD requirements, or you would like us to review things in more detail, please call us on 01227 277667 or email us at admin@mphaccountants.co.uk. Our team is always happy to help explain how the figures are calculated and make sure everything is being treated correctly.
