MyDriveTime Solves Making Tax Digital For You
Introduction
Traditionally, self-employed driving instructors have submitted an annual tax return that confirms their income, expenses, profit and tax to be paid. One return, one payment.
That’s changing now, with the introduction of HMRC’s new system, “Making Tax Digital for Income Tax”. With it comes a new approach to how we will all manage our accounting records, and how we’ll report our financial performance to HMRC each year.
In a nutshell, there will be more to do each year and more cost to do it. Yippee…
Still, it isn’t all bad. Keeping your records up to date can reduce the dreaded end-of-year panic and help you understand your financial and tax position as the year progresses.
Here at MyDriveTime, we’ve created a unique set of support tools and partnerships to take away the pain. You can choose the level of help that best suits your needs, and our UK-based team of real humans will be on hand every step of the way.
Before you begin
For a full introduction to Making Tax Digital, including the who, why, what, where and when, visit our Making Tax Digital page.
In this article, we’ll assume you’ve seen that page and know the basics, and focus on the practicalities of compliance through our new tools.
Prefer to watch?
See how MyDriveTime helps you manage Making Tax Digital, from keeping digital records to choosing the support option that works for you.
This video covers the gist of this article. Continue reading below for the full step-by-step guide.
Making Tax Digital – the MyDriveTime Way
There are three key things you’ll need to do to comply with Making Tax Digital:
1. Record
2. Choose
3. Submit
1. Keep digital records in MyDriveTime
MyDriveTime was founded on the principle of better management of financial record so, hopefully, you will have already been doing this. If not, it’s important to start now.
Enter records of income and expenses via the website or mobile app as they happen, for everything from ‘L’ plates to a new car, plus payments extracted from your (occasionally reluctant) students.
As an added benefit, logging the student fees you receive helps you keep track of the time they’ve bought, used and have available. We let you know when lessons are covered or require payment and warn you when prepaid balances are running low.
Watch our video guide on how to manage money in the MyDriveTime mobile app.
2. Choose how to manage your quarterly updates
Some instructors feel completely at ease managing their own bookkeeping and tax returns. Others prefer professional input to reduce the burden and help them meet their accounting and HMRC obligations.
Whichever group you’re in, we have a solution to suit. Consider each of the 4 options we provide and choose the one that best meets your specific needs.
| Option | Best suited to | How it works |
|---|---|---|
| Managed | Instructors with complex needs or those who want minimal involvement | Delivered by FBTC. Covers quarterly updates, the final declaration and wider financial matters. Watch our video on how this option works |
| Hybrid | Instructors comfortable with quarterly updates but who want help with their final declaration | Delivered with Drive Ahead Bookkeeping using Xero. It provides the best of both worlds. |
| Connect | Confident users or accountants who are happy to work independently with Xero | You or your accountant manage the quarterly updates and final declaration in Xero. |
| Export | Instructors using another accountant or accounting platform | Record in MyDriveTime, export to CSV and send to your accountant or other software. Watch our video on how this option works |
Suffice to say, each option differs in cost, based on the amount of help you’ll receive. You’ll pay third-parties directly.
To get things set up, log into our website and visit the My Work > Settings > Making Tax Digital page to begin.
3. Submit your quarterly updates and final declaration
Rather than wait until the end of the year, HMRC now wants to know how you’re doing as the year progresses. Not only does this help our government to plan and set expectations for tax receipts, but it helps you keep track of your estimated tax liability at the end of the year.
You’ll still only pay your tax once, at the end of the year, just as you do now.
And here’s where MyDriveTime rises higher than all others to help you manage this commitment, by holding your hand through the process each quarter and at year end.
Each quarter, we’ll let you know when the month-long submission window opens.
You’ll use our MTD management tools to check and update your records before self-certify that you’ve:
- Reviewed your records
- Exported your records to your chosen third-party solution
- Submitted your records to HMRC
At the end of the year, you’ll export any remaining records to your chosen solution, complete your final declaration and pay the balance of tax owed.
Things worth knowing
If you haven’t already, please read up on the information provided on our Making Tax Digital page. This will ensure you’re well versed on how everything works and when you need to start.
You’ll notice a new Making Tax Digital panel on the dashboard in the mobile app, and can also access the web based management tools immediately. If you’re taking part this year, use these tools now. If you’re not taking part yet, you can ignore these tools until you are signed up.
That said, it’s worth familiarising yourself with these tools. You can self-certify if you like, and even begin submitting data quarterly to your chosen third-party immediately, to get used to the process.
For this year only, HMRC will not penalise you for late or missing quarterly submissions, as part of their ‘light touch’ approach. They know this is new and will take some getting used to – for them too – but we’d still encourage you to start as you mean to go on.
Why MyDriveTime?
Moreso than any other option available to you, MyDriveTime has always strived to do what’s right by instructors with care, compassion and a unique mission to digitise our profession. We put performance and passion before profit.
Since launching as the original solution in 2014, our approach to security, reliability and support has been unmatched. We contribute regularly to the industry and take the time to ensure you benefit from carefully and professionally crafted software. It’s the genuine article; no ‘made by AI’ here…
We know how important reliable, trusted software is for your business and don’t take it lightly. We hope you share our belief that these attributes are the most important for the health and success of your business and are delighted to provide you with unrivalled Making Tax Digital assistance.
Don’t leave it to chance. Join MyDriveTime today.