Making Tax Digital: How to Comply with New Requirements for the Property Industry
In April, all VAT-registered businesses need to record and submit their tax returns digitally. For property companies, what does this mean?
The UK government’s Make Tax Digital (MTD) plan is intended to make it easier for individuals and businesses alike to record and keep on top of their tax and personal finance. HMRC loses billions of pounds every year due to tax errors and it believes that part of this is due to the way that businesses declare their tax.
From April 2019, all VAT-registered businesses are required to keep a digital record of their tax and use software to submit their VAT returns. In some cases, MTD is being rolled out slowly. For instance, the system will be ready for Corporation tax next year, while some companies (such as not-for-profit) have until October to make the switch. However, all other businesses with a taxable turnover of £85,000 or more need to comply with MTD by April.
In short, this means that companies need to ensure that their management software is compliant and can handle the necessary digital requirements for tax records and returns. Thousands of property companies in the UK are affected and must take action soon.
How Does MTD Affect Those Working in the Property Industry?
If your business isn’t fully digital at the moment, this is the chance to make the switch. For established companies already using comprehensive property management software, it will likely mean upgrading your systems or finding new software that can fulfil the requirements.
For landlords, if your income from property is above the £85,000 threshold, you will need to make your tax digital before April 2019. If your property income is below the threshold, HMRC would like tax returns to be digital by April 2020.
Making Tax Digital Compatible Software
Companies working in the property industry need to check that their software is compliant with MTD. The government website has a full list of all software that customers can use to submit VAT tax returns. The listed software makes the switch much easier and allows companies to submit to HMRC.
Check with your current systems software provider to see if an upgrade will make MTD a seamless process.
Property Management Software for MTD
Logican’s property portfolio management software, LogiPro, is listed on the UK government website. Commercial and residential landlords can use the software, as can surveyors and managing agents.
As well as being compatible with MTD requirements, LogiPro also includes full accounting functionality to ensure property companies keep on top of finances and tax, as well as distributing payments on time and tracking incoming payments.
- LogiPro keeps track of all receipts and expenses, distributes payments, calculates and distributes funds.
- It integrates with electronic banking.
- LogiPro also uses transaction logging for complete accountability and transparency, plus single click VAT returns and powerful bank reconciliation facility.
If you want to use effective property portfolio software that fulfils the requirements of MTD, LogiPro is an excellent choice. The software can be customised specifically for your company and all Logican software meets data protection requirements.
With just a month left until MTD comes into force, your business must be ready for the coming changes. Even if your business isn’t required to make the change by April, starting the process of going digital now will be worthwhile.
If your property portfolio software isn’t yet ready for Making Tax Digital, find out what you need to do. If you would like a free demo of LogiPro, contact us today.