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How to Prepare for Making Tax Digital Compatible Software

Essential information to have ready

Making Tax Digital (MTD) is coming and compulsory if you submit an Income Tax Self Assessment (ITSA) form as a landlord or self-employed (sole trading company) with a combined business or property income over £10,000 per annum.

Previous articles have outlined the MTD requirements, introduced compatible digital software options and answered some of your questions. Hopefully, by now, you will be starting to implement the recommended steps. 

What you’ll need to sign up for an MTD compatible software

There are several things to have ready when signing up for software and linking it to HMRC:

  • business name
  • business start date (or the date income commenced if you have property)
  • email address
  • National Insurance number
  • accounting period
  • accounting type such as cash or standard accounting

You must also register to file Self Assessment tax returns and have Government Gateway user credentials (an ID and password). 

Introducing Xero accounting software 

Key Accountancy Services are Xero Partners. The accounting platform is built for small businesses and offers an easy way to maintain all records, pay bills, submit VAT returns and claim expenses. 

As previously mentioned, you don’t have to choose Xero as your accounting software. If you do, we are here to help every step of the way and are pleased to offer free training to introduce you to the Xero online dashboard and navigate the setup.

  • Connect your bank accounts
  • Reconcile banking transactions
  • Set up clients and rules
  • Generate quotes
  • Create invoices
  • Pay suppliers
  • Link apps such as mileage and expenses 
  • Connect external payment apps such as PayPal, Stripe and GoCardless

>> Book a free session to review Xero.

Accounting records must be kept for at least six years plus the current year. Digital software makes it easy to preserve digital records for many more years if necessary.

>> Previous: How Much Will Implementing Making Tax Digital Income Tax Cost You?  

>> Next: How to Get Started with Xero Digital Accounting