Presentation made by Peter Disney of Wood & Disney on making tax digital requirements coming into force in April 2019

1. Digital VAT
Are you ready for April 2019?

2. Why the change?
• HMRC systems were in need of replacement
• Different systems for PAYE, Self Assessment,
business tax, VAT etc
• New systems with one digital account per tax
payer for all information
• Tax Gap – by making us file quarterly information
and keeping our records digitally, HMRC believe
it will reduce errors and increase the tax take

3. What is changing first?
• There is already a digital personal tax account
“behind the scenes” to eventually replace the self
assessment return
• VAT is changing next
• Business Tax will then change a year later

4. When exactly does it change?
• Starts 1 April 2019 for some VAT registered
businesses
• Records must be “digital” by then
• VAT return must be filed digitally with HMRC
• All other businesses expected to have to go
digital from April 2020
• So when are you going to take action?

5. Who does this apply to?
• VAT registered businesses with sales above the
£85,000 threshold
• Charities and the “digitally challenged” may be
exempt
• All other businesses including those not
registered for VAT expected to have to comply
from April 2020
• So it will apply to you either April 2019 or April
2020?

6. How is this going to happen?
• Quarterly updating of records to HMRC
• Record keeping must be digital
• Record submission must be digital
• Submission deadlines of just one month after
each quarter
• Substantial penalties for non compliance
• HMRC will compare digital records from different
sources
• HMRC will likely encourage quarterly payments

7. What does Digital mean?
• No more hand written ledgers and cash books
• Spreadsheets – yes but in association with
“applicable software” so NOT digital on their own
• Desktop software – yes but only with the latest
versions so watch the costs
• Cloud accounting software – yes this is digital

8. Will you cope?
• Recent research suggested over 70% of
business owners not prepared
• Both planning and action is needed
• Your accountant may have hundreds of clients to
move across to a digital system. Can (s)he
cope?
• But not all doom and gloom
• Cloud accounting software can actually bring you
significant benefits

9. The cloud: Already Everywhere
Do you send/receive emails via Gmail, Office 365,
iCloud (the name gives it away), etc.?
Keeping in touch with friends and family on
Facebook, Twitter or Instagram, or another social
media app?
Hosted in the cloud.
The cloud hosts all those millions of pictures of
meals and babies that nobody asked to see.

10. Cloud computing is not the
future…It is the PRESENT.
Billions of people are already conducting
their business, buying their shopping,
interacting with each other and generally
living their lives thanks to the cloud.

11. The Pace of Change has been
Phenomenal
The world’s biggest retailer is 24 years old and owns
less than a third of the stock it sells
The world’s most popular media owner is 14 years
old and creates little of its own content
The world’s biggest accommodation provider is 10
years old and owns no buildings
The world’s biggest taxi company is 9 years old and
owns no vehicles

12. WHY?
march of the millennials….
Never known life without the www
Obsessed with mobile devices
They ‘own’ very little
Not a big fan of ‘face to face’
No patience and concept of ‘waiting’ is bizarre
Emailing is out of date
Not use to highly structured ways of working

13. So Cloud Accounting???
Just too exciting…

14. Benefits to Business Owners?
Lots and Lots but lets just look at
The Awesome 8

15. 1 - Comply with Making Tax Digital
• We all want a hassle free life and the main
cloud accounting systems are already
compliant with HMRC
• We are already filing clients’ VAT returns
using the new system

16. 2 - Available 24/7.
• Easy access anytime, anywhere with just
an internet browser. No need to worry
about which operating system you use to
access your software. Accessible from
your PC, laptop, Mac, tablet, iPad or any
mobile phone. In the office, on the move,
at home or even on holiday, your financial
information is always available to you.

17. 3 - Easy to understand and intuitive
to use.
• Written with the Cloud in mind rather than
based upon a traditional PC software
means the language used is modern and
easy to understand compared to the
traditional software which used confusing
accountancy jargon.

18. 4 - Easy to test and experience for
free.
• Most Cloud systems allow you to play with
the software for up to 30 days (and
sometimes longer) completely free of
charge and with no commitment.

19. 5 - No upfront Capital Cost.
• Once you do decide which cloud based
software is best for your business you just
pay a small monthly fee. There is no need
to buy expensive software and pay
upfront. The small monthly fee also
includes all upgrades, updates and back
up. No annual contract so you can cancel
at any time.

20. 6 - Risk reduction!!!!
• Your data is automatically backed up by
the software supplier so you never have to
worry about losing your data.
• If paranoid can still download csv files of
all transactions.
• Upgrades and updates automatically
applied for simplicity and efficiency.

21. 7 - Supercharge your business with
‘00s of Apps
• Cloud software links to Apps which can
improve the accuracy of your data inputting.
• Sales invoices on the move
• Automatic credit control
• Bank streams
• Receipt photography
• Industry specific Apps
• There will be an App which saves you hours
of work every single week.

22. So Number 8….
•Drum roll please………

23. 8 - Have totally up to date “live
data”.
• You will see at the touch of a button a true
and up to date picture of exactly how your
business is doing.
• Leading to better communication and
faster, more effective decision making.
• Better decision making will lead to greater
profits.

24. The Real Time Accountant is here!
• The end of quarterly accounts…we simply
can not wait that long.
• To be ready each quarter we must be
reviewing our clients numbers in real time.
• Correcting errors as they occur and not in
a rush just before they need to be filed.
• Working “Real Time” with our clients
means we have time to plan properly…

25. The Danger of waiting.
• Some accountants simply don’t
believe even now that this is going to
happen.
• £1.3 billion has been given to HMRC
to make this happen.

26. The Danger of waiting.
• So leaving it until “later” simply means
more work closer to the deadline for the
accountant and the greater the likelihood
of not being ready.
• Accountants are already blaming their
clients for not wanting to accept cloud
accounting but in our experience the
clients do not even know about it.

27. What we are hearing from other
accountants.
• Older accountants are talking about
retiring or selling their practices before the
deadlines. But who will suffer?
• Younger accountants will not want to take
over old fashioned practices with old
fashioned clients.
• We have already seen some accountants
firing clients who refuse to use this new
technology.

28. How soon do you need to start?
• Early planning is essential and you need
to be thinking about how your current
accounting system will have to change to
meet HMRC’s new demands.
• New systems however do not work well
without adequate training so you need to
budget for this…

29. Don’t forget the Awesome 8
Massive advantages of having the
“Real Time Accountant”.
This Real Time collaboration with
your accountant will lead to more
tax reduction opportunities and
potential business growth.

30. Wood and Disney are multi award
winning chartered accountants
including a 2018 national award for
“Changing Lives”.
Wood and Disney are Xero Certified
Advisors and QuickBooks Online
ProAdvisors and can help you cope
with this transition.

31. Michelin Guide to Accountants?
We appear in the Added Value Networks
alternative to The Michelin Guide
The Business Owners Guide to the UK’s Best
Accountancy Practices.
The only accountants currently in Essex