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Exclusive: Making Tax Digital for ITSA: How accountants can prepare sole trader clients

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Making Tax Digital for ITSA: How accountants can prepare sole trader clients

#Making #Tax #Digital #ITSA #accountants #prepare #sole #trader #clients

With Making Tax Digital for VAT in full swing, for accountants, attention is turning to the next phase of MTD: Making Tax Digital (MTD) for Income Tax Self Assessment.

This is sometimes referred to as MTD for ITSA.

The rules are straightforward, but it’s once again going to be the accountancy profession getting their noses dirty at the proverbial coalface in helping clients adapt—especially millions of sole traders who are above the £10,000 threshold.

In this article, we highlight some considerations that might help kickstart your processes when it comes to supporting those individuals.

Here’s what we cover:

Why accountants should start preparing their sole trader clients now

As far as most clients are concerned, MTD for ITSA has several fronts for which sole traders must prepare:

  1. Transitioning to accounting software, if they haven’t already. Alternatively, sole traders might use some kind of bridging solution if they insist on using spreadsheets (while taking measures to be legally compliant with the digital linking rules, of course—remember that copy and pasting numbers into a spreadsheet from elsewhere will probably be legally prohibited).
  2. Switch to digital record-keeping for their income tax accounting relating to self-employment, including compliance within all processes connected to this (e.g. data capture from documents such as invoices or bills), again within the requirements of digital linking.
  3. Basis period reform for sole traders, for the minority that requires it. It could theoretically be necessary for a business to implement this for the tax year 2023/24.

Planning must start now because every component in the above list is going to demand time and resources. As mentioned, some of the deadlines requiring action could be here very soon.

For most practices, the very first job will be to segment their client lists according to these criteria. That in itself will be time-consuming.

Once that’s done, practices should dedicate resources around educating and implementing. And this will be a continual process up to and even beyond the start date of MTD for ITSA in April 2024.

This situation is complicated by the following, which must be taken into account during any planning:

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  • Some sole traders will also be landlords, so they may have to also use MTD for ITSA for property income even if their sole trader income is below £10,000 (that is, their sole trader plus rental income is greater than £10,000).
  • General partnerships join MTD for ITSA in April 2025, so will require their own education and onboarding processes leading up to that time. It’s not yet clear when other income tax-paying individuals and businesses will be required to sign up to MTD for ITSA but, if MTD for VAT is a guide, this will probably be staggered across the years following 2024. In other words, MTD for ITSA is persistently going to require planning and resources, perhaps all the way to the end of the decade.
  • Basis period reform affects all sole traders, not just those above the £10,000 threshold for MTD for ITSA, so the filtering for that particular task must be drawn from your entire sole trader client base.
  • Those below the MTD for ITSA threshold may still contact you and require help when they learn of MTD for ITSA (e.g. from advertisements). Although the answer may be simple for these clients, it will still consume time and resources. In other words, the days following an HMRC mail-out may set your phones on fire!

Ensure your clients understand the importance of adopting the compliance change sooner rather than later. Move now and the price stays the same, but move later and they’re likely to incur higher fees.

Encourage your clients to take advantage of any pilot schemes, such as that available for MTD for ITSA.

Remember that they will need compatible software, as will you if you wish to maximise your service offering for them.

Tips to communicate the changes to sole traders

While talk of digitalisation in accountancy is nothing new, practices that are willing to embrace cutting-edge technologies are going to achieve efficiencies when it comes to communication.

Without using these technologies, practices risk being overwhelmed.

So, let’s take a look at a few suggestions—starting with the more innovative way of driving engagement.

Instagram/Facebook Live

Virtually all your clients will have social media accounts of some kind, and your practice will hopefully already have its own social media presence to connect with this.

Facebook Live (also on Instagram in a broadly similar way) is simply a way of broadcasting live video, just like a news reporter on TV.

Viewers are limited to commenting (and you can approve comments before they’re seen), but you also can share polls and display web links (e.g. to HMRC sites that explain more).

You can live broadcast from a phone or computer, or use the Live Producer software for a more professional approach.

Videoconferencing/webinars

It might no longer be cutting edge but using Zoom or Microsoft Teams to host an online webinar fits within many people’s comfort zones nowadays, following the enforced technical migration caused by the pandemic.

Because these are essentially online meetings in all but name, invites can be scheduled within Zoom or Microsoft accounts and sent to clients, which can boost engagement.

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They can be interactive, and the webinar can be recorded too so that you can allow access at a later date, deriving further value from your work.

Newsletters

Via email or printed and posted, newsletters remain a key way to communicate with clients about all kinds of issues. They’re less straightforward than videoconferencing in today’s world, though, because, you’ll need to ensure you remain GDPR compliant.

In other words, people usually must opt-in to receive emails or newsletters. But email newsletters in particular have had a resurgence recently, and people aren’t as resistant to them as they once were.

And the rest…

The Pareto principle says 80% of results typically arise from 20% of the effort.

In terms of general education for a practice, it’s the small things that often work best.

Tack a mention of MTD for ITSA onto every incoming or outgoing client phone call, for example.

Add a brief paragraph box to the invoices you send out.

Have everybody add a mention of MTD for ITSA to their email signatures.

Put a banner on your website mentioning it, and how you can help.

Put this question out to your staff to see if you receive any innovative answers based on the peculiarities of your practice: How would they spread the word about MTD for ITSA?

MTD for ITSA benefits for your sole trader clients

With any luck, many of your existing clients required to use MTD for ITSA will already use a cloud accounting solution. If so, there’s a good chance this will be MTD-ready in time for April 2024, although the client will need to register for MTD (or you can on their behalf), plus switch on the MTD functionality within the software.

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Remember that MTD for VAT and MTD for ITSA are two entirely separate considerations—accounting software with MTD for VAT already activated won’t automatically be activated for MTD for ITSA.

Those using older desktop-based software may need to seek an upgrade.

Similarly, the upgrade path for those relying on spreadsheets may be a little bumpy, with a need to apply compatible bridging plugins for the spreadsheet app.

For those who aren’t using software, you should emphasise the benefits of accounting software that you’ll already know about—a 24/7 view of cash flow, for example, so they always know where they stand.

This way clients can spot problems coming, as well as see opportunities when they arise.

But it’s important to emphasise newer technologies too.

Automating bank reconciliation, for example, is transforming business admin by massively reducing the amount of time taken to match payments against invoices.

Similarly, receipt capture means getting vital MTD-required data into the client’s accounting becomes a piece of cake—just snap the receipt or invoice with a mobile phone straight after purchase or receipt of the goods.

And don’t forget perhaps the biggest boon for any accountant—linking client accounting to your own systems, so you can see their live financial data.

This allows for you to create new value propositions around periodic check-ins, for example. This shows how MTD for ITSA is ultimately a business opportunity for practices.

Final thoughts

MTD for ITSA might feel like some time away.

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But as an accountant, you have to start planning immediately.

Resources and budget needs to be allocated, and the sheer scale of the work must be quantified. This might feel like the early stages but you know from experience with MTD for VAT that key dates will be here before we know it.

Moving forward, smart practices are already creating working parties that meet regularly and set goals so that milestones can be achieved.

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Exclusive: Biden opens the possibility of more offshore oil drilling in the Gulf of Mexico – TalkOfNews.com

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Biden opens the possibility of more offshore oil drilling in the Gulf of Mexico

#Biden #opens #possibility #offshore #oil #drilling #Gulf #Mexico

An oil and gas drilling platform stands offshore as waves churned from Tropical Storm Karen come ashore in Dauphin Island, Alabama, October 5, 2013.

Steve Nesius | Reuters

The Biden administration released a five-year offshore oil and gas drilling development plan on Friday that would block all new drilling in the Atlantic and Pacific Oceans within U.S. waters, but would allow some lease sales in the Gulf of Mexico and the south coast of Alaska.

The proposed plan, which has not been finalized, could allow up to 11 lease sales over the next five years. It also includes an option for the administration to conduct no sales. The Department of the Interior is inviting the public to comment on the program.

Biden had vowed to suspend all new federal drilling on public lands and waters, but that position resulted in legal challenges from several Republican-led states and the oil sector.

As U.S. energy prices rise, the fossil fuel sector has urged the administration to increase offshore drilling in an effort to lower gas prices at the pump. But climate groups have argued that new lease sales would exacerbate climate change while doing nothing to bring down prices.

A recent report published by Apogee Economics and Policy said that a temporary suspension in new offshore oil and gas sales would have minimal impact on gas prices for consumers — with prices edging up by less than 1 cent per gallon over the next nearly two decades.

“From Day One, President Biden and I have made clear our commitment to transition to a clean energy economy,” Interior Secretary Deb Haaland said in a statement on Friday. “Today, we put forward an opportunity for the American people to consider and provide input on the future of offshore oil and gas leasing.”

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The Interior’s most recent offshore oil and gas auction was in November in the Gulf of Mexico. A court order later vacated the sale, arguing the administration didn’t adequately account for the harm to the environment and impact on climate change.

Nearly 95% of U.S. offshore oil production and 71% of offshore natural gas production occurs in the Gulf of Mexico, according to the Natural Resources Defense Council. Roughly 15% of oil production in the U.S. comes from offshore drilling.

Environmental groups on Friday condemned the administration for proposing limited new lease sales instead of announcing a ban on all new drilling.

“The Biden administration had an opportunity to meet the moment on climate and end new offshore oil leasing in Interior’s five-year program,” said Drew Caputo, vice president of litigation at Earthjustice. “Instead, its proposal to serve up a bunch of new offshore oil lease sales is a failure of climate leadership and a breach of their climate promises.”

Environmental groups have also argued that new leasing would impede the White House’s goal to slash carbon emissions by at least 50% by 2030 in an effort to keep global warming under 1.5 degrees Celsius.

“This draft plan falls short of what we desperately need: an end to new oil and gas drilling in federal waters,” Food & Water Watch Executive Director Wenonah Hauter said in a statement. “President Biden has called the climate crisis the existential threat of our time, but the administration continues to pursue policies that will only make it worse.”

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Exclusive: This Simple Exercise Will Help You Turn Failure Into Success – TalkOfNews.com

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This Simple Exercise Will Help You Turn Failure Into Success

#Simple #Exercise #Turn #Failure #Success

If you want your business or your career to be a big success, rather than focusing only on the positive, you should also look closely at your failures. In fact, you should write those failures up and create a “rejection resume.” That advice comes from Eli Joseph, Ph.D., faculty member at Columbia University and Queens College and author of The Perfect Rejection Resume.

A rejection resume is straightforward to create, as he explains in his book. Ask yourself the same questions you’d answer in a traditional resume–but in reverse. Instead of saying where you graduated from, list the schools you applied to but didn’t get into, or the ones you dropped out of, or the courses you failed. Instead of listing the jobs you succeeded at, describe the ones you were fired from, the projects that crashed and burned, and the biggest mistakes you made. The result will be a brief document, a few pages long or maybe just one page, that contains a record of your biggest disappointments, and the biggest mistakes you’ve made.

What’s the purpose of the rejection resume? “Most people do not like to talk about their failures and how many organizations rejected them or how many venture capitalists rejected their proposals,” Joseph explains. “So it’s just a conversation starter.” That is, it can help you start a conversation with yourself. “To say, hey I have this document, and I can take advantage of these lessons.”

Here are some ways a rejection resume can benefit you.

1. It can help you turn current failures into future successes.

“As you’re building a business, you can write down, ‘I failed today at this task, and it was partially detrimental for now, but I’ve learned from my mistake.’ And look around as you go along.” With this approach, the rejection resume can become a powerful motivational tool, he says, because if you look at your failure, you may be able to see the mistakes that led you there. And you can choose not to make those mistakes in the future.

2. It can let you see how far you’ve come.

Anytime is a great time to create a rejection resume, Joseph says, but it’s an especially useful thing to do if you’ve suffered a disheartening setback. “It’s the one that stings a little bit, and you know, that’s what we need to harp on and focus on. So we can bookmark that time that we felt down from a particular failure, but we’ve rebounded.”

His comment makes me think about my attempt, decades ago, to work as a business reporter for a daily newspaper, the only job from which I’ve ever been fired. I hated the job and was actually delighted to leave it, but it also felt like a colossal failure. With hindsight I can see that it was completely the wrong fit for me and how losing that job was in many ways a piece of very good luck.

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3. It will help you connect with others.

“People always love a comeback story,” Joseph says. You may prefer to focus on your successes, but in fact, you almost certainly have your own comeback story and your own history of failure before success, he says. “And people always love that. They love the underdog.”

This is why, he says, if you share part of your rejection resume story on social media, it’s likely to get a lot of attention. “It’s a good marketing tool,” he says. “People who do speaking engagements and keynotes tend to reel the audience in through their personal endeavors and how they’ve overcome failure.” The rejection resume can help you organize that information so you can help others learn from your experiences, he said.

There’s a growing audience of Inc.com readers who receive a daily text from me with a self-care or motivational micro-challenge or tip. (Interested in joining? Here’s more information and an invitation to an extended free trial.) Many are entrepreneurs or business leaders and many have told me about how even devastating failures have helped lead them build bigger, more meaningful successes. Seeing your failures as something to be commemorated in a rejection resume can be a great start.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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Exclusive: Mystery rocket makes moonfall – TalkOfNews.com

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Mystery rocket makes moonfall

#Mystery #rocket #moonfall

Hello and welcome back to Week in Review, where we recap the biggest stories from the week. If you want this in your inbox every Saturday, sign up here.

Greg Kumparak is still on vacation, but not to worry! He’ll be back at the helm next week to bring you our biggest stories. Until then, I’ve got you covered.

First for some quick business. TechCrunch+ is having an Independence Day sale, which gets you 50% off on an annual subscription. Need more? TC+ Editor-in-Chief Alex Wilhelm gives you all the reasons to take the plunge here.

Okay let’s go to the moon! Yes, the moon. Some space junk crashed to the lunar surface this week, causing some enthusiastic observers to scratch their heads. Was it from SpaceX? Was it from a rocket launched in 2014 by the China National Space Administration? We still don’t know, but Devin Coldewey had a chat with Darren McKnight from LeoLabs, which has built a network of debris-tracking radar, to get some more insight.

Image Credits: NASA/Goddard/Arizona State University

other stuff

Speaking of space: Ever want to stare longingly into the depths of the universe and actually have something stare back? This is supposed to happen in two weeks when the James Webb Space Telescope will release its first images. “This is farther than humanity has ever looked before,” NASA administrator Bill Nelson said during a media briefing this week. Maybe the truth is out there.

Tesla Autopilot layoffs: The automaker this week laid off 195 employees across two offices in its Autopilot division. Those who were laid off filled supervisor, labeler and data analyst roles. Questions persist about what impact the layoffs will have on Tesla’s wider advanced driver assistance system. The remaining 81 staffers on the Autopilot team will be relocated to another office, as the San Mateo office will be shuttered.

SPAC subpoenas: A New York-based federal grand jury sent subpoenas to the board of Digital World, which is preparing to acquire Trump Media & Technology Group, Donald Trump’s media group responsible for Truth Social. According to an SEC filing, the subpoenas are an effort to gather more information about “Digital World’s S-1 filings, communications with or about multiple individuals, and information regarding Rocket One Capital.”

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Deepfake job apps: The FBI this week issued a warning that deepfakes are being used along with stolen information to apply for jobs. A part of this even involves video interviews. “In these interviews, the actions and lip movement of the person seen interviewed on-camera do not completely coordinate with the audio of the person speaking. At times, actions such as coughing, sneezing, or other auditory actions are not aligned with what is presented visually,” the FBI said in a statement announcing the disturbing news.

Party pooper: Welp, that 2020-era indefinite ban on unauthorized parties at Airbnbs is now permanent. This means no open-invitation parties and no parties whose attendance exceeds 16. The company said in a blog post that since they instituted the ban 2 years ago, there was a 44% year-over-year decrease in the rate of party reports. There will be no partying on, Garth.

Human And Artificial Intelligence Cooperating Concept

Image Credits: DrAfter123 / Getty Images

audio stuff

Over on the TechCrunch Podcast Network, Christine Tao, founder of Sounding Board, joined Darrell and Jordan on Found to talk about difficulties she and her co-founder faced while fundraising and how they established the customer type that made scaling possible.

And on the Wednesday episode of Equity, Natasha Mascarenhas asked a question inspired by a recent post penned by TC’s own Rebecca Szkutak: What’s in the fine print for term sheets these days, and what does that tell us about who is going to be in control during the downturn?

Check out our full roundup.

added stuff

Want even more TechCrunch? Head on over to the aptly named TechCrunch+, where we get to go a bit deeper on the topics our subscribers tell us they care about. Some of the good stuff from this week includes:

The SEC rejected bitcoin spot ETFs again. Now what?
The SEC’s decisions aren’t a first for the industry; the government agency has denied over a dozen bitcoin spot ETFs in the past year alone while approving several bitcoin future-based ETFs, Jacquelyn Melinek reports.

Disclose your Scope 3 emissions, you cowards
Tim De Chant takes on the companies that claim they’re serious about carbon emissions. In short, if they’re serious, then they’ll estimate their Scope 3 emissions and not undermine attempts to make Scope 3 disclosures standard.

Pitch Deck Teardown: Wilco’s $7 million seed deck
Haje’s back with another pitch deck teardown, this week from Wilco, a company whose funding he covered last week. He is pretty excited about Wilco’s deck, as, he says, it’s 19 slides that tick all of the boxes.

Image Credits: Wilco (opens in a new window)

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