When business owners start to think about investing in business assets, such as a new vehichle or some tools or machinery, it’s a great time to talk to your accountant or bookkeeper, depending on what sort of advice you need. If you feel confident in making your own decision, once given the options by your bookkeeper, then don’t pay for the higher accountants fees this time! However, bear in mind that your bookkeeper isn’t qualified to advise you what you should do, only what you could do. Professional bookkeepers with Self-Assessment qualifications and all professional accountants will know all the latest rules on what capital allowances can be claimed against tax. This is really important because HMRC are forever moving the goalposts as they update the tax system, so it makes sense to scrutinise the timing of the investment, which can make an enormous difference to the amount of money you could save by simply delaying the investment, or perhaps buying it a bit sooner than originally intended. Secondly, there are different rules for capital allowances depending on things like the environmental rating of the asset, whether it’s new or second hand and whether you once owned it privately. This is a complex area of the tax system so don’t assume you have all the knowledge necessary to make the best decision.

And remember folks, absolutely anyone can call themselves an ‘accountant’ or ‘bookkeeper’, even if they have no professional qualifications, and ……….. get this, even if they’ve been in prison for embezzlement. Yes, that’s crazy but true, and it does happen! So, make sure you protect yourself and your business by choosing a professional, which means someone registered with one of the professional bodies. That way you know they’re competent, of good character, insured and qualified. I’m proud to be an Associate Member of the Institute of Certified Bookkeepers.

Around half of people in the UK report that they’ve been targeted by scammers pretending to be from HMRC. There are a number of things you can do to protect yourself when you receive an email that appears to be from HMRC. Firstly, be on the look out for shoddy grammar and spelling mistakes, and check the email address that the message has originated from. Scammers often have poor use of the English language, and they use email addresses which are similar to the official one but don’t quite match. For example tax1@hmrc. org.uk.
Secondly, beware of the content of the email. Often online thieves will try to trigger certain emotions such as hope or fear to distract you and tempt you in. For example they might promise a tax rebate, or pretend to be from the compliance team and suggest that you need to cooperate with them in order to avoid fines and other penalties. Beware of messages that tell you to take action ‘urgently’ or within a short time period as this is often another clue that someone is trying to steal your data.
Thirdly, if the email asks you to reply with personal details or business data, be very suspicious as HMRC would never ask you to reveal any data in an email that should be kept secure. Also, check over the email address that you’re being asked to reply to, and be on your guard when opening any attachments. Scammers have been known to include links which lead to a fake HMRC ‘home page’ that looks almost identical to the genuine HMRC one, and attachments can contain nasty viruses which are purely designed to obtain your financial data.
If you’re ever suspicious of an email pupporting to be from HMRC, you should forward the message to HMRC’s phishing team at phishing@hmrc.gsi.gov.uk. If you think you’ve already been the victim of a scam you can also contact HMRC’s security team at security.custcon@hmrc.gsi.gov.uk. They will be able to offer you help and guidance to overcome the data breach.

To answer the first part, ‘MTD’ simply means keeping business and records digitally and updating them electronically through the daily process of recording business transactions online. This will revolutionise the way people interact with HMRC because rather than submitting an annual tax return containing historical data, individuals will each have their own ‘live’ tax account which is continually being updated as information flows automatically between bank accounts, bookkeeping software and HMRC.
To answer the second part, all but a tiny minority of businesses will have to comply. Exemptions are available for people with religious objections, for people unable to participate due to age or disability and for those without an internet connection. Initially all VAT registered businesses with turnovers above the VAT threshold will have to comply, with other businesses being affected soon after.
And finally, what benefits might be expected from the new system? Well firstly, people will always know where they stand when it comes to tax as the picture will be an ongoing one rather than a snapshot after the event. They will have all the relevant information in one place such as the amount of tax already paid and the amount of ongoing profit on which tax will be due. They’ll be able to see their liabilities and assets in one place, in real time, which will help with business planning and budgeting. No longer will people be wondering how much tax they’re liable for at year end, and there shouldn’t be any large build ups of tax owed back to them by HMRC as tax information is collected and processed in as close to real time as possible. Moreover, the fact that your financial information will be online rather than held inside a single computer, means you’ll benefit from able to collaborate more effectively with your accountant or bookkeeper as you discuss transactions from within the software itself. It’s my belief that once people get used to the new way of doing things, they’ll wish it had happened years ago!
You’re welcome to call the Torbay Bookkeeping Practice on 01803 363089 to arrange a free consultation and demonstration of Xero and/or QuickBooks Online digital accounting software to help you get ready for MTD.