Update on Making Tax Digital (MTD) for Income Tax Self-Assessment (ITSA)
The Government recently announced that MTD for Income Tax Self Assessment (ITSA) will be introduced a year later, in the tax year beginning April 2024. Don’t celebrate too quickly, the MTD for VAT registered business’ with a turnover under £85,000 per annum remains effective for the VAT period commencing after 1 April 2022.
The news will be welcomed by many businesses which are still trying to heal from the impact of the COVID-19 pandemic.
General partnerships will not be required to join MTD for ITSA until the tax year beginning in April 2025. It will be confirmed at a later date when all other types of partnerships will be required to join. Whatsmore, the new system of penalties for the late filing and late payment of tax for ITSA, announced in March 2021, will also accordingly be introduced later for the respective groups.
A guide to app integrations with cloud accounting software and an update on news that businesses will have an extra year to prepare for the digitalisation of Income Tax
Recently, our sister firm FoxKash have seen first-hand how cloud accounting has the ability to be the perfect partner to our new normal. COVID-19 has changed how we do business with technology, the use of videoconferencing tools such as Teams and Zoom has boomed. But it is also an opportunity for cloud accounting too, and that is where FoxKash can support businesses to work more effectively than before in the ‘new normal’.
Cloud accounting can support flexible working by ensuring that wherever your team is based, you can all access the information you need quickly and effectively. By making data accessible to everyone, a company can have a quick overview of its financial position.
Cloud accounting software has the added benefit of being able to connect other apps to your accounting software to further reduce the amount of time spent on data processing and increase efficiencies. There are numerous software options on the market, but our team can work with whatever you have.
Below we have summarised three apps that will talk to your cloud accounting and which may appeal to your business needs.
A2X
Best suited to: clients who sell via online platforms.
A2X automates e-commerce accounting for businesses that sell via Shopify, Amazon, Etsy, Walmart and eBay sellers worldwide.
A2X works by integrating with the online selling platform, to analyse the sales received and the fees charged, to automatically appear in your accounting software and reconcile to the corresponding bank deposits.
Pros:
- Compatibility with accounting software
- Time-saving, eliminates any manual data entry and bookkeeping.
- A2X maintains a standard of extreme accuracy
- Tracks your Amazon FBA inventory stock locations each month. FBA refers to a packaging and shipping service offered by Amazon to its sellers.
- The app offers its users integrators. An integrator designs a software system that connects a variety of apps and creates a personalised accounting system for your business.
- Positive reviews, e-commerce accountants and experts consistently give A2X positive reviews.
- Offers its potential users a free trial before they commit to purchasing the software.
Cons:
- Higher prices, services for larger companies come at a higher price point.
Square
Best suited to: take payments from customers, online or in-person, quickly and securely.
Whether you’re selling in person or online, Square can help you take all kinds of payments quickly and securely. Square offers a variety of different hardware and software to suit a range of business types and sizes, to process credit cards, apple pay and android pay including contactless options.
Your daily sales transactions can then also be automatically imported, summarised and populated into Xero.
Square payments can be added as a payment option to sales invoices within Xero. When invoices are then emailed to clients, they then have the option to pay instantly via the link to Square.
Pros:
- Square deposits funds into your bank account within one to two days
- The battery is designed to last all-day
- There are tons of integrations including a variety of eCommerce platforms
- You can receive lower transaction fees with a merchant account
- Free to deposit cash transactions
- Square charges 1.75% per transaction, no matter the transaction size
- Take payments offline
Cons:
- The card reader isn’t as ergonomic as others
- Not suitable for high-risk industries (strong likelihood of refunds and returns)
Re-Leased
Best suited to: property management businesses.
Re-leased is one central hub which incorporates all of your tenants, accounts, lease agreements, inspections, maintenance and more. This data is synchronised with your accounting software to save admin time and eliminate double handling.
With two-way integration invoices raised in Re-Leased will be sent directly to your accounting software or vice versa. From your accounting software, you can create a profit and loss report and from Re-leased you can see which tenants have paid what, and who is in arrears.
Pros:
- Robust Common Area Maintenance (CAM) budgeting makes this solution ideal for those managing commercial properties
- Seamlessly integrates with popular accounting solutions, Xero and QuickBooks Online
Cons:
- Does not offer an open API, which restricts third-party integrations
- Does not support two-way texting and emailing.
Our dedicated and experienced MTD team bring you clear, practical and proactive advice to help you meet compliance challenges head-on. Read more about ways in which we can help here.
