Making Tax Digital

Due to the new Government Legislation ‘Making Tax Digital’, barristers who aren’t currently recording their financial transactions digitally are being urged to seek guidance on how to do so as soon as possible to avoid them breaking the law, when the legislation comes into force in April 2019.

Making Tax Digital (MTD) requires all VAT registered businesses with a taxable turnover above the VAT threshold to keep their records digitally and submit VAT returns using third party software. The digital records will need to be kept up-to-date on a regular basis, as the same data will be used when submitting VAT returns.

To help address this law change, experts at Cassons for Counsel, part of the Baldwins Group, are encouraging barristers to start using cloud accounting software as quickly as possible. While barristers can employ accountants and bookkeepers to record their data digitally and submit VAT returns digitally on their behalf, there is a range of software available that can be used across a range of mobile devices to make the digital reporting process simple and convenient for barristers to manage themselves.

Barristers who decide to input their own financial records will need to select a cloud-based accounting software, as the Government will not be providing any software or online services of their own. The Government Gateway, that up to now was used to submit VAT filings, will also cease from March 2019 onwards.

There are numerous cloud accounting software solutions available and Cassons for Counsel, can advise barristers on the best ones available and which ones fit their requirements best. All of these solutions enable the user to maintain their records digitally as well as submitting VAT returns.

A key benefit of using online accounting software is that the user is able to update their records while on the move, enabling barristers to integrate their administrative tasks into everyday life. One of the most convenient capabilities is being able to add expenses to your records by snapping a photo on your smartphone.

Those wanting to monitor other details such as their cash flow wherever they want, whenever they want, can also do this with cloud accounting software.

The new legislation adds to what is an already problematic area for barristers, who often have issues budgeting for payments to HMRC, due to the unpredictability of when cash from cases they’ve acted on, will land in their bank account.

One way of getting around this funding issue would have been to use a credit card, however, the Government are no longer allowing this, which is why Cassons for Counsel has introduced its own ‘Tax Funding Plan’ where barristers can spread the cost over six, ten or 12 months.

“While these changes may initially add to the workload of barristers’ busy schedules, it is of vital importance to ensure that their reporting processes don’t end up breaking the law because they are out of date,” says Tony Reynolds, Head of the Bar Dept Manager at Cassons, part of the Baldwins Group.
 
“Cloud accounting techniques will ultimately make barristers’ lives easier and we are encouraging barristers to embrace the new technology as quickly as possible, so they are familiar with it by the time use of it is mandatory.

“Combining cloud-based software with a ‘Tax Funding Plan’ where needed, is one of the most highly-recommended approaches, as it will enable barristers to be in full control of their record keeping wherever and whenever they want, while also being able to manage their tax payments to reflect their cash flow.”

Cassons, part of the Baldwins Group, is a firm of accountants and business advisers who have been delivering financial advice to barristers for more than 40 years.

For further advice from Cassons for Counsel please contact Janet Dentith or Tony Reynolds on 0345 337 9409.