Xero: Making Tax Digital for Property Businesses
How is Making Tax Digital being rolled out in the UK?
The vision set out by HMRC is clear, they want to make tax administration more effective, more efficient, and simple for taxpayers. In order to achieve this, HMRC have put together a long term plan for all tax returns to be submitted digitally using a compatible software.
VAT returns have been the first to be rolled out and since April 2019, this has meant that businesses earning over £85,000 pounds a year have been required to submit their VAT returns digitally. By April 2022, this will be extended to all businesses in the UK.
From April 2024, income tax will also need to be submitted digitally for those unincorporated businesses and landlords with a total gross income over £10,000 pounds a year. If this applies to you, this means submitting a quarterly summary of your business income and expenses to HMRC using MTD compatible software.
There is no doubt that for property businesses specifically, considering the implementation of a MTD compliant product such as Xero will help not only with submitting digital tax returns but also influence their overall accounting strategy. For many agents, even if VAT and income tax may not be as relevant, the fact that corporation tax is being brought to the discussion table towards the end of 2022 will bring the topic more close to home. As we move towards a more digital world, property businesses, like the rest of the UK, will need to adapt and plan for the future to both comply and maximise on efficiency.
Please check out the HMRC website here for further details.
So why Xero?
There are several reasons why over 2.7 million businesses use Xero:
1. MTD compliant
2. HMRC recognised
3. Easy to use
4. Unlimited users
6. Supplies business and client accounts!
In short, Xero allows you to quickly and efficiently comply with making tax digital and also sets your business up for the future of accounting. Its easy to track all transactions running through your client account and business account in an automated way and to easily report on and comply with the changing landscape of the industry.
So where does Rentancy come in?
Where Xero acts as your fully fledged accounting package. Rentancy acts as your centralised database pulling all information through our API connection, linking rental invoices and bills to properties and landlords. Rentancy acts as the consolidator of information and makes it easy for property managers to understand the financial performance of an asset, to track arrears and to produce statements from one source of truth without needing to look into the accounting package!
Rentancy even goes one step further in providing a team of PM's and bookkeepers with more than 10+ years experience in property management and client accounting to help streamline your operations.
If you want to learn more, then speak to an expert by clicking here