From April 2019, businesses with a turnover above the VAT threshold (currently £85,000) will have to:
Keep their records digitally (for VAT purposes only), and
Provide their VAT return information to HM Revenue and Customs (HMRC) through Making Tax Digital (MTD) functional compatible software
MTD requires a digital record for each transaction and SME Professional creates a digital record for each transaction in your client account.
For lettings, the following information is required:
The date rentals are due and the date the payment is received (generally undertaken on a cash accounting basis in a client account)
The rental value is also required, which is again included.
The invoice date and value of expenses is required which is covered by the landlord deductions area or direct invoicing area
Expense categories can be set against expense types
Deducting amounts and percentage fees as landlord expenses must also be possible
Under the original proposals, HMRC envisaged that a digital record would include a record of each item of income and expense and evidence of each transaction such as copies of invoices and receipts. In the revised proposals, the requirement to keep digital records will not include an obligation to digitally store images of invoices and receipts, but you can do so in our software if you wish.
SME Professional preserves these records as the legislation requires and provides off-site backups. Following deregistration, businesses must preserve their records for up to 6 years. For businesses in scope for MTD, those records that relate to the period between mandatory and deregistration must be preserved digitally for up to 6 years.
Users will transfer fees as normal to their current account. Your accounting software for the business will handle salaries, office costs and VAT making tax digital submissions (for example, Sage, Xero, Freeagent, Quickbooks) as opposed to SME Professional, which is responsible for your client account.