How do you pay tax as a sole trader? A Glasgow accountant from The Kelvin Partnership will guide you through the up coming changes of the tax submission process, Making Tax Digital.
How do You Pay Tax as a Sole Trader?
Making Tax Digital
With the deadline for transitioning over to Making Tax Digital (MTD) fast approaching, it’s more important now than ever to understand your tax responsibilities as a sole trader. Making Tax Digital means that, as a sole trader or someone who is self-employed, you will be required to submit tax records digitally if your annual turnover is above the current VAT threshold – £85,000 for 2018/19.
The deadline to comply with HMRC’s MTD scheme is the 1st April 2019.
Though it is those with the highest annual turnover who must comply with MTD first, come April 2020 all other businesses – including freelancers and sole traders – must join.
Do you have the right accounting software?
To make the changeover as painless as possible in April, make sure that you are using accounting software. Across the most popular platforms for online accounting, changes are being made to ensure that submitting and recording accounts to HMRC is a simple process as possible. If you currently don’t have a digital records system for your accounts, we will be more than happy to help you find the most suitable software for your needs.
Familiarise Yourself the New Process
Whilst your waiting for the switch over in April, you might as well take steps to familiarise yourself with the MTD process as much as possible. You might want to;
- Make notes of dates that concern you
- Take time to fully understand how your accounting software functions
- Review the way you currently go about sorting your accounts and matters of finance. The Kelvin Partnership team can help you figure out an alternative accounts process suitable to you as a sole trader.
Though it is January and you may be struggling for motivation, it is important that as a sole trader you are fully prepared for the looming MTD scheme. April will be here in no time! Take a look at our last post for some motivation tips!
Outsource to an Accountant
The final way we suggest you go about submitting or preparing to submit to HMRC and MTD in April, is to hand over tax responsibilities to a qualified and experienced accountant. This way you won’t feel overwhelmed and worried about the upcoming digital switchover! As a sole trader, time is valuable. So, don’t waste yours by stressing about your taxes. Our specialist team are here to take over preparation, records and submission.