Accounting Services
Making Tax Digital
As the biggest tax shakeup we have seen since the 1970s, getting up to speed with Making Tax Digital is a daunting prospect for many businesses.
At K2 we are committed to helping our customers in the transition, allowing for a soft-landing into the new era of tax reporting.
HMRC’s initiative to digitalise the UK tax system is progressing. The transformation began in April 2019 with the introduction of Making Tax Digital (MTD) for VAT, targeting businesses with taxable turnover above the VAT threshold. This mandate was extended to all VAT-registered businesses in April 2022. The rollout of Making Tax Digital for Income Tax Self Assessment (MTD ITSA) will commence in April 2026.
Initially, Making Tax Digital VAT applied to businesses with taxable turnover above the VAT threshold from April 2019. By April 2022, it was expanded to include all VAT-registered businesses. Making Tax Digital ITSA will begin in April 2026 for self-employed individuals and property income earners with gross income over £50,000. In April 2027, the threshold will lower to include those with income over £30,000. Currently, there is no scheduled date for extending MTD ITSA to partnerships.
A review was conducted to consider mandating MTD ITSA for self-employed individuals and landlords with gross income below £30,000. For now, they will not be required to comply with MTD ITSA, but this decision is subject to ongoing review.
The start date for Making Tax Digital for Corporation Tax has not yet been announced.
Key elements of Making Tax Digital include:
- Businesses and organisations, including those with property income, must maintain digital accounting records. Paper records no longer meet tax legislation requirements.
- Businesses must use compatible software to submit updates and returns to HMRC. This software interfaces with HMRC’s API platform. Once a business signs up for MTD, the current HMRC online tax return services are withdrawn for the relevant tax.
Making Tax Digital: a Timeline
- From April 2019: MTD VAT became mandatory for VAT-registered businesses and organisations with taxable turnover above the VAT threshold. Complex businesses were given a six-month deferral until October 1, 2019.
- From April 2022: MTD VAT became mandatory for all VAT-registered businesses and organisations.
- From April 2026: MTD ITSA will become mandatory for self-employed individuals and those with property income, applicable to those with combined turnover and rental income over £50,000.
- From April 2027: MTD ITSA will extend to include those with combined turnover and rental income over £30,000.
The K2 Accountancy Group App: Your 24/7 Pocket Accountant
We are pleased to present our companion K2 Accountancy Group mobile app.
This is available for free to download to your iPhone, iPad or Android device and is packed full of useful tax tables, calculators and important financial dates which can be accessed anywhere you have a data connection.
The app also boasts a GPS mileage tracker, which can be used to keep an accurate account of your expenses, as well as a receipt manager and a weekly update on news in the world of business and finance.
Reach new heights
Interim solutions for growing businesses
Our team are experts in Sage software and we are constantly investing in cutting-edge software such as Iris which allows us to stay ahead of the latest developments which, in turn, enables us to assist you in futureproofing your business in the ever-changing tax landscape.
Our team will guide you towards compliance with all of the MTD requirements and review your accounting system, offering potential improvements where appropriate as well as providing you with the relevant dates by which your business needs to comply with the latest regulations and reviewing your options with regards to software.
How we can help
Our team will provide a fully supported and tailored service for all of your accounting needs. Whether you need bookkeeping and payroll services or a management accountant get in touch and we will ensure your requirements are met to the highest standard for the best value.
Our offering includes but is not limited to:
- Sales Invoicing
- Purchase Invoicing
- Bank Payments
- Sales Receipts
- Expenses
- Credit Control
- VAT
- Bank Reconciliation
- Credit Card Recording and Reconciliation
- Factoring and Invoice Finance
- General Ledger
- Filing Systems
- Payroll
Client Stories
Groovy UK
We have worked with K2 for 3½ years and, in that time, Kym has proved invaluable in delivering the financial element of our strategy. Kym’s refreshing approach, depth of knowledge and expertise has enabled our continued financial growth.
Kym takes the time to understand the business, not a one size fits all approach, building a strong, effective relationship that continues to stand the test of time.
Your Finance Team
Meet the team that make it happen
We’ve worked with hundreds of businesses from small, unique companies to multinational corporations. The consistent theme is that business owners love our refreshing approach to accounting and how we use technology to make their lives easier.