Running a business is hard enough - but your tax return shouldn’t be

The new MTD system requires businesses earning over £50,000 to transition from annual to continuous digital filing (Picture: Getty Images) Whatever business you own, from barbers and bakers to photographers and physios, if you’re self-employed, then changes are about to happen to the way you file your tax return. If you have a turnover of over £50,000, you’ll need to start filing your tax returns more often through the new Making Tax Digital (MTD) system. Instead of the dreaded annual tax return, the idea of the new system is that filing taxes becomes more continuous throughout the year, a bit like how it works for full-time employees, but you’ll only pay the tax once (or twice) a year, as before. There are lots of options to choose from, from bookkeeping software to accounting apps, but if you don’t want to add to your admin lists and you’re looking for a safe, simple and easy way to start paying tax, ANNA provides a fully automated system which will do the hard work for you. You can ditch the manual spreadsheets for automated tools that handle your tax filing with ANNA to streamline your admin (Picture: Getty Images) Here, we look at what changes are coming and how ANNA can make the transition easier. What is Making Tax Digital? Anyone who already files a tax return will know that it’s not exactly a fun task, and for a lot of us, it gets pushed to the bottom of the to-do list and put off. It only happens once a year, but that means there’s a lot of admin to do, and one big chunk of money to pay. To make the system easier, Making Tax Digital was introduced by HMRC, and from 6 April, all self-employed workers with a turnover of £50,000 or more will need to start using the new system. Starting April 6, self-employed high-earners must swap the annual tax scramble for HMRC’s new digital system (Picture: Getty Images) This applies to sole traders or landlords and people who get income from self-employment or property (or both). It should make the entire tax reporting system work better, because it will be updated more regularly and there will be real-time reporting of income and expenses. This means less room for errors and mistakes, and ending the once-a-year tax return. Do I need to sign up for MTD? At the moment, just those on higher incomes need to be prepared for the change in April, but over the next few years, millions of other freelancers will need to join the new system too. MTD is designed to make paying tax easier, and it means self-employed workers will no longer have to file manual records, and they’ll need to move to digital-friendly systems to can automatically do the work for you. While the April deadline focuses on higher earners, millions more freelancers must soon embrace digital automation (Picture: Getty Images) If you’re eligible to start reporting via MTD, you’ll need to make sure you have the right software set up. Any freelancer with a turnover of over £50,000 will probably have to move to the MTD scheme unless they’re exempt. At the moment, there are a few situations where someone might be exempt from joining. These include those without a National Insurance number, disabled people who receive the blind person’s allowance, those receiving care relief who earn income from property or self-employment and limited companies.   How can freelancers prepare for the change to MTD? You can choose whether you sign up for an MTD-service by yourself or if you have an account or bookkeeper who may offer to do this for you (for a fee). There is also a tool on the HMRC website to help you find the right service for your business needs. There are lots of different companies to choose from here. Some are free, and some you can pay for – usually these include a range of extra features too. From DIY digital tools to hiring professional help, freelancers have several paths to ensure MTD compliance (Picture: Getty Images) Most of the MTD services available either require you to fill in your details once a quarter or they link to your bank account and automatically import your business transactions and expenses. Using an automated system takes a lot less time, as you don’t have to do any of the manual work. Once you’ve signed up to an MTD-compliant service, digital updates of your accounts will be sent every three months to HMRC. If these are late, penalties will be applied.  Why use ANNA for your MTD returns? The right software for your business will depend on things like how much your turnover is, how many employees you have (if any), and how complicated or simple your business structure is. The idea behind ANNA is to help with the paperwork and admin behind running a business. You are the business owner, and whether you’re a landlord or a plumber, your business is your main focus. ANNA believes you shouldn’t have to then spend hours – or days – thinking, worrying about or doing extra admin and paperwork. Let ANNA handle the tax so you can focus on running your business, not paperwork (Picture: ANNA) That’s why it’s designed the MTD Self-Assessment for self-employed workers. The system uses AI to automatically file your tax returns, doing pretty much everything for you once you’ve signed up. You will need to link your business bank account to the ANNA, and then it will do the ‘behind the scenes’ work of sending your reports every three months to HMRC without you having to be involved.  While some other MTD programmes require customer interaction, ANNA will do everything for you. You also won’t be sold any extras that you don’t need, such as expensive software features and courses, and guides on how to do MTD properly. It’s also free to sign up (some services require payments), and doesn’t require any extra learning, admin or accounting knowledge to get going. When do I need to sign up? If you’re eligible (you have a turnover of £50,000 or more), you’ll need to be ready and signed up to an MTD scheme by 6 April. But even if this isn’t you, there are lots of benefits to getting prepared early, and if you want a system without stress, ANNA can seamlessly help – automatically linking your digital records and saving you from another pile of admin. Starting early also means you can get to grips with how MTD works, there’s a lower risk of a last-minute panic, and you’re less likely to face penalties for late or missed payments if you’ve got it all worked out in advance.