Dixcart Business Advisory February Newsletter: Post Brexit Action to Take, Making Tax Digital and Cloud Software

Post Brexit Implications

The 31 of January 2020 has come and gone and we have now officially left the EU and find ourselves in a limbo called the “transition period”. Whether for or against Brexit we now need to look to the future and plan as best we can for what is to come.

VAT

In respect of VAT, what has changed? Well in short nothing for now, we will continue to calculate and file our VAT returns and related filings such as EC Sales Lists and Intrastat as normal. This will continue to be the case for the length of the transition period which will last until 31 December 2020. However from 2021, various changes will come into effect for businesses and individuals who trade with the EU. The full extent of how future trade will operate is still under negotiation, however given the extent of the changes to come it is never too early to start planning for 2021!

If you want further information on how your business may be impacted please get in touch and we can assist you in preparing and planning for the impacts of Brexit.

Statutory Accounts & Audit Compliance

So what’s changed?  Nothing for now during the transition period however, from 1 January 2021, there are changes to key words in the Companies Act 2006.  We predict this will impact some exemptions currently available which may result in the new need for an audit requirement for group accounts, previously not required, and changes to the availability of simpler accounting regimes (e.g. FRS 102,1A).  If your company is part of a group with a parent in the EEA, get in touch as these changes may affect you. Planning is key to ensuring continued compliance within report deadlines.

We can support you during the transition period by keeping you up to date with changes and tailoring our services to you. Please ask to speak to Emma Evans our expert on this topic.

MTD The Next Stage

Last year saw HMRC introduce making tax digital (MTD) legislation which impacted all VAT registered businesses with an annual taxable turnover over the registration threshold (currently £85,000). This threshold needs to be assessed on an ongoing basis so even if MTD wasn’t compulsory last year, it may become in the future.

The legislation involves three key areas, keeping digital records, filing returns digitally and digital links between transfers of data. The first two parts were fully implemented and mandatory for MTD compliant businesses for VAT quarters beginning on or after 1 April 2019 (delayed for group VAT submissions to 1 October 2019). HMRC introduced what they referred to as a “soft landing period” for businesses to have digital links in place between all parts of their functional compatible software. This gave businesses a further year before the digital links element of the new legislation was mandatory, a year which is almost up. Digital links between software will be mandatory from 1 April 2020 (and from 1 October 2020 for group VAT registrations).

If you want further information about what the new legislation means for you and your business then please get in touch and we can assist you in making sure you are compliant with MTD.

Cloud Software

Cloud (online) software has significantly grown in popularity over the past couple of years, as has the functionality it offers. Providers such as Xero offer a platform for businesses to be able to maintain their books using OCR software, direct bank feeds, automation as well as having the ability to link with other software and apps, making the experience unique to the business.

By utilising all the functions and features businesses are able to save time and improve the quality of the information being recorded. Features such as the mobile app allow people to maintain their records on the go and the ability to be able to login into the system on the cloud makes maintenance and monitoring of the numbers far more accessible than being constrained to a desktop system.

We offer migration assistance, training, system review and ongoing support in all aspects of cloud software. If you have any questions on how cloud software could work in your business or would like assistance in an existing system, please get in touch.

Any Questions or Further Information

If you need help on any of the topics covered, please contact Tara Lister on: hello@dixcartuk.com

The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.