Hi Kevin,
Currently, our software includes all logged transactions (both paid and unpaid) in your quarterly updates. This is because, under the current MTD requirements, HMRC does not require a specific accounting basis (Cash or Accruals) to be locked in for these interim updates.
Why This Doesn't Affect Your Final Tax Bill It is important to remember that these quarterly updates are not "tax returns." They are simply a digital record of your activity.
- Basis Selection: You are only required to formally declare your accounting basis (Cash vs. Accruals) after the tax year has ended.
- Year-End Accuracy: The only point at which the exact accuracy of income and expenses is finalized is during the year-end process.
- The Adjustment Period: During the MTD Year-End process, you will have the opportunity to adjust your figures. This ensures that your final tax return reflects the correct accounting basis and excludes any unpaid items if you are using the Cash Basis.
Upcoming Software Improvements We are currently updating our platform to align with HMRC’s recent changes to how accounting types are stored. Very soon, you will be able to:
- Set your Accounting Type: Explicitly choose between "Cash" or "Accruals" for each income source.
- Filter Updates: Once set to "Cash Basis," the software will automatically exclude unpaid invoices from your quarterly updates.
- Resubmit if Desired: You will have the option to resubmit your latest update using the new basis if you prefer your quarterly snapshots to align more closely with your year-end expectations.
Tommy
You must 