Understanding HMRC's Digital Services for Accountants
HMRC (HM Revenue and Customs) has significantly changed how businesses and individuals file their taxes in recent years. One of these changes is the shift towards digital services, which has affected accountants. As an accountant, staying updated with these changes and understanding how they impact your work is crucial.
The HMRC’s digital services for accountants can be broken down into three main categories: Making Tax Digital (MTD), Agent Services Account (ASA), and the Online Government Gateway service.
Navigating HMRC's Digital Services for Accountants
HMRC’s Digital Services are an integral part of the tax administration system in the UK. They have been designed to make it easier for businesses and individuals to interact with HMRC and improve the efficiency and accuracy of tax compliance. As an accountant, you must understand these digital services to provide your clients with foolproof accounting solutions.
Registering for an Agent Services Account
Registering for an Agent Services Account is the first step towards being able to use any of HMRC’s digital services as an accountant. This account allows you to access various tools and services that make managing your clients’ taxes more accessible and efficient.
To register for an Agent Services Account, you will need to follow the steps outlined below:
Submitting Tax Returns and VAT online
Submitting tax returns and VAT online involves:
- Registering for an online account with HMRC.
- Using approved accounting software.
- Thoroughly reviewing all information before submission.
Staying organised, accurate, and up-to-date with HMRC’s digital requirements will help ensure your business remains compliant and avoid penalties or delays.
In addition to submitting tax returns online, businesses can sign up for Making Tax Digital (MTD) for VAT. This initiative requires businesses above the VAT threshold (currently £85,000) to keep digital records and submit their VAT returns through compatible software. MTD aims to make the process of filing taxes more streamlined and accurate.
To submit a VAT return online, businesses can use HMRC’s online service or approved accounting software. Like tax returns, it is essential to ensure all information is correct before submission.
Using Making Tax Digital software
HMRC’s Making Tax Digital (MTD) initiative is a new way of managing and submitting taxes that will be mandatory for all businesses by 2023. One of the key aspects of MTD is the use of specialised software designed to help companies keep digital records and submit their taxes online. This software bridges your financial data and HMRC’s systems, allowing seamless communication and automated updates.
The first step in using MTD software is choosing the right one for your business. Once you have selected a suitable MTD software, you must set it up according to your business structure and financial records. This involves linking your bank accounts and setting up relevant tax codes. Most software providers offer tutorials or support guides for this initial setup process.