Making tax digital

[Bobthewindow]

I’m Ltd company, just me working though, I’ve been using cleanerplanner for the last few years, my accountant has access to it and 600 customers, approx turnover £50k a year. Just a few invoices to send each month. Every other contact is via text message and online bank payments.

Any suggestions as to what people are going to use after April for making Tax Digital?

My accountant suggested Sage at £12 a month.

Th

 

[Iron Giant]

I didn't think it was coming into effect till 2026 for sole traders who are vat registered, as your accountant is your agent then I don't get why him or her isn't paying out for compatible software if you are having to pay for Sage then I'd be telling your accountant they are no longer needed.

You'd think it would be possible to import files into Sage otherwise for people like us who are already digital it will mean more than twice the work to have to input information in Sage @P4dstar you use Squeegee and Sage, don't you?

 

[Cghwindowcleaning]

I believe the making tax digital compulsory has been pushed to 26-27.So no need to do anything differen.

Your accountant should know the exact date to clarify it for you.

 

[Clean zero]

Yes it’s been pushed back to 26-27.Just thinking 600 customers with 50k turnover seems a lot of customers but not a great return or am I missing something?

 

[Iron Giant]

Yes it’s been pushed back to 26-27.Just thinking 600 customers with 50k turnover seems a lot of customers but not a great return or am I missing something?

Could be doing jobs on a 6 weekly basis

 

[ched999uk]

Could be doing jobs on a 6 weekly basis

Even so it averages out at a little over £10 per customer based on 6 weekly (8 cleans a year).

 

[Iron Giant]

Even so it averages out at a little over £10 per customer based on 6 weekly (8 cleans a year).

Couldn't be bothered to do the maths ? but that's cheap for 600 jobs

 

[Truckcab79]

Not wishing to hijack the thread but anyone decided that after starting to use Sage or Quikbooks etc that they don’t actually need an accountant? Two clients who both happen to be HMRC inspectors told me in the last few weeks that paying for and using the apps is doing the accountants job for them and it’s £2k a year I don’t need to spend.

I’ve found her useful for knowing what I can legitimately claim as expenses that I wouldn’t have thought of personally but now I know that what am I getting for my money. ?

 

[ched999uk]

Not wishing to hijack the thread but anyone decided that after starting to use Sage or Quikbooks etc that they don’t actually need an accountant? Two clients who both happen to be HMRC inspectors told me in the last few weeks that paying for and using the apps is doing the accountants job for them and it’s £2k a year I don’t need to spend.

I’ve found her useful for knowing what I can legitimately claim as expenses that I wouldn’t have thought of personally but now I know that what am I getting for my money. ?

Must admit I has a similar thought. Why would Sage and Quikbooks create software that did just half the job?

If you need to do payroll then you might need an accountant plus depreciation of assets etc but once this making tax digital stuff starts getting closer I think it definitely makes sense to look into the software tools. Maybe even run one of the tools in parallel for a year and see how much an accountant actually saves when you consider their fees. It will probably depend on the size of your business.

 

[Part Timer]

If you need to do payroll

Just download the "Basic PAYE Tools" and submit the wages, that works out any tax and NI for free

 

[Truckcab79]

Currently not Ltd through I have a dormant company ‘on standby’ as it were, and not running payroll. I’m basically sole trader, £135k turnover in last tax year. Not VAT registered but may be in near future. Accountant charging me £2k for as far as I can see not very much other than knowing what stuff can be expensed that perhaps I wouldn’t have thought of. Trying to get me to go LTD reckons it would have saved me a few grand last year. My clients who are HMRC inspectors says she’s being too simplistic on that score and that I have no need for an accountant at all and when I told them that she wanted me to use SAGE just thinks it’s a way of managing her future business to make sure we don’t all just do it ourselves. A mate of mine was told pretty much the same thing completed unconnected by a retired accountant client. Just set me thinking that I’m laying out a stack of money for the convenience of not doing it myself. If I go limited she wants £3k so broadly I’d need to earn £5k pre-tax just to pay her ?

 

[Chris34]

Currently not Ltd through I have a dormant company ‘on standby’ as it were, and not running payroll. I’m basically sole trader, £135k turnover in last tax year. Not VAT registered but may be in near future. Accountant charging me £2k for as far as I can see not very much other than knowing what stuff can be expensed that perhaps I wouldn’t have thought of. Trying to get me to go LTD reckons it would have saved me a few grand last year. My clients who are HMRC inspectors says she’s being too simplistic on that score and that I have no need for an accountant at all and when I told them that she wanted me to use SAGE just thinks it’s a way of managing her future business to make sure we don’t all just do it ourselves. A mate of mine was told pretty much the same thing completed unconnected by a retired accountant client. Just set me thinking that I’m laying out a stack of money for the convenience of not doing it myself. If I go limited she wants £3k so broadly I’d need to earn £5k pre-tax just to pay her ?

You should be VAT registered

Register for VAT

How to register for VAT, change your details, cancel your registration, register for VAT in EU countries.

www.gov.uk

 

[Part Timer]

Currently not Ltd through I have a dormant company ‘on standby’ as it were, and not running payroll. I’m basically sole trader, £135k turnover in last tax year. Not VAT registered but may be in near future. Accountant charging me £2k for as far as I can see not very much other than knowing what stuff can be expensed that perhaps I wouldn’t have thought of. Trying to get me to go LTD reckons it would have saved me a few grand last year. My clients who are HMRC inspectors says she’s being too simplistic on that score and that I have no need for an accountant at all and when I told them that she wanted me to use SAGE just thinks it’s a way of managing her future business to make sure we don’t all just do it ourselves. A mate of mine was told pretty much the same thing completed unconnected by a retired accountant client. Just set me thinking that I’m laying out a stack of money for the convenience of not doing it myself. If I go limited she wants £3k so broadly I’d need to earn £5k pre-tax just to pay her ?

You do realise the VAT threshold is based on turnover, including goods purchased, not on income minus purchases. It is also based on a rolling year and not on a tax year. Every day you leave not registering the fine and interest will be getting bigger. You will also have to charge VAT on any invoices since you breached the threshold and if any are to people that can't claim it back then this will be coming out of your pocket. Been there, done that.

 

[Chris34]

You do realise the VAT threshold is based on turnover, including goods purchased, not on income minus purchases. It is also based on a rolling year and not on a tax year. Every day you leave not registering the fine and interest will be getting bigger. You will also have to charge VAT on any invoices since you breached the threshold and if any are to people that can't claim it back then this will be coming out of your pocket. Been there, done that.

This is why I have done my own accounts and learned the basics from day one in my last business. The only reason I'd use an accountant is to oversee what I've done to see if there are any potential savings I could make.

From what I understand, even if you use an accountant the responsibility for your tax affairs rests on your own shoulders, so if you have an accountant who has done a poor job well it's not them who have to pay for the mistakes / penalties it's the individual who's tax affairs it concerns who pays the price.

I rather have a basic understanding on my own money and how it all works. It's not rocket science at the end of the day and it's one of the most important parts to the business.

 

[Truckcab79]

Just to clarify, as I should have done originally, I’m aware of the VAT threshold and as it’s a rolling 12 months I had two £30k patio jobs in the last reported tax year and the accountant moved the payment of the second one into the following period to keep me just below. She’s currently got all my bank statements to confirm if / when I’ll go over. As of today I don’t have to register. That’s the sort of thing to be fair to her I feel it’s worth paying her the money to keep an eye on. More financial advice than tax return service, but as I understand it the various apps should do that for me so long as I submit the info.

 

[Truckcab79]

You do realise the VAT threshold is based on turnover, including goods purchased, not on income minus purchases. It is also based on a rolling year and not on a tax year. Every day you leave not registering the fine and interest will be getting bigger. You will also have to charge VAT on any invoices since you breached the threshold and if any are to people that can't claim it back then this will be coming out of your pocket. Been there, done that.

You do realise the VAT threshold is based on turnover, including goods purchased, not on income minus purchases. It is also based on a rolling year and not on a tax year. Every day you leave not registering the fine and interest will be getting bigger. You will also have to charge VAT on any invoices since you breached the threshold and if any are to people that can't claim it back then this will be coming out of your pocket. Been there, done that.

Yep. It’s the rolling rather than calendar year that save me though I suspect I’m going to have to register shortly.

 

[Truckcab79]

You should be VAT registered

Register for VAT

How to register for VAT, change your details, cancel your registration, register for VAT in EU countries.

www.gov.uk

Not currently as it’s a rolling year.

 

[Truckcab79]

This is why I have done my own accounts and learned the basics from day one in my last business. The only reason I'd use an accountant is to oversee what I've done to see if there are any potential savings I could make.

From what I understand, even if you use an accountant the responsibility for your tax affairs rests on your own shoulders, so if you have an accountant who has done a poor job well it's not them who have to pay for the mistakes / penalties it's the individual who's tax affairs it concerns who pays the price.

I rather have a basic understanding on my own money and how it all works. It's not rocket science at the end of the day and it's one of the most important parts to the business.

Correct and it’s the ‘overseeing’ I’m loathe to lose to be honest. That and the fact I pay ‘insurance’ to her so that if I get investigated she handles the whole process as my agent, and pays/reimburses any fine due to her error or advice.

 

[scottish cleaning service]

Did a survey for RBS today. Looks like card readers will be obsolete fairly soon. Going by them it seems we will all be using our smart phones to collect payment. ?

 

[Chris34]

Yep. It’s the rolling rather than calendar year that save me though I suspect I’m going to have to register shortly.

You might be able to get out of registering. I've not looked into it as it won't be of any benefit to my business but I think you've mentioned that you do a variety of work? If that's the case then it might be possible to set up a landscaping business under one ltd company and then say a pressure washing / cleaning business under another ltd company.

So long as the two business are not classed as the same type of business then you can keep them separate and each individual business will have a £85k threshold. So you could earn £84k in the landscaping and £84k in the cleaning but not pay VAT.

As I say though I've not looked into it but off the top off my head I think that's about right and would be something I would do / look into.

As a sole trader though you can't do that, it's all lumped into one as the individual is the business.

 

[Truckcab79]

You might be able to get out of registering. I've not looked into it as it won't be of any benefit to my business but I think you've mentioned that you do a variety of work? If that's the case then it might be possible to set up a landscaping business under one ltd company and then say a pressure washing / cleaning business under another ltd company.

So long as the two business are not classed as the same type of business then you can keep them separate and each individual business will have a £85k threshold. So you could earn £84k in the landscaping and £84k in the cleaning but not pay VAT.

As I say though I've not looked into it but off the top off my head I think that's about right and would be something I would do / look into.

As a sole trader though you can't do that, it's all lumped into one as the individual is the business.

Full marks to you my friend. You’ve pretty much word for word said the same as one of my HMRC clients. She said it needs to be distinctly different but a landscaping business and a handyman business would almost certainly fit the criteria of being two legitimately separate businesses. I’ve already emailed my accountant to query exactly that.