Her Majesty’s Revenue and Customs office recently updated their guidance on the upcoming VAT Threshold changes and Making Tax Digital Initiatives. We at Greenback understand that change can be a bit unnerving without proper planning. Thankfully Greenback has your back. But we’ll get to that in a moment. First, an overview:
According to the most recent guidance, Making Tax Digital is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs. Their stated primary goals are to ensure that this initiative helps taxpayers be more effective, more efficient, and make the entirety of the process easier for taxpayers to get their tax right. VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) are required to follow the Making Tax Digital rules by keeping digital records and using software to submit their VAT returns. Those below the VAT threshold have the option of voluntarily join the Making Tax Digital service at any time, however as of April 2022, Making Tax Digital rules shall apply to them as well.
As stated above, if you are a Square Seller and you sell into the UK, you will be expected to follow the Making Tax Digital rules by keeping digital records and using software to submit any VAT returns.
Greenback auto-fetches your sales, refunds, and payouts from Square and syncs them to your preferred accounting apps, i.e. Xero, QuickBooks, etc. We even create ancillary transactions for all of your selling-related expenses such as payment processing fees, subscription fees, etc. We are fanatical about these itemized details because it’s imperative to know your cost of sales, especially as it relates to accounting for VAT.
Greenback not only allows you to export itemized transaction data to your accounting file, but we'll also retain a copy of the transaction data ensuring your ongoing compliance with Making Tax Digital regulations.
The most important thing to remember is that Square holds funds on your behalf. You already know that when you make a sale or accept a payment, Square will take the payment from the customer, then deposit the funds to a holding account. This is your balance of funds comprised of different types of transactions (e.g., payments, refunds, etc.). Square will then transfer these funds (payouts) from your available account balance into your actual bank account based on your payout schedule.
You also know that Square withdraws funds from your balance (ie: Square funds/balance) to pay for various expenses such as payment processing fees and refunds. Thus, the transfers Square will periodically make to your actual bank account will not reflect all the credits and/or debits behind the scenes. That's where Greenback provides outstanding support. Our platform will sync and generate all the transactions that affect your Square balance.
The best way to get started is to visit us here: https://www.greenback.com/register/signup
After you sign up for an account and progress through our simple integration process, we have a well-versed support staff dedicated to helping you tie up any loose ends. Our goal during setup is to ensure the right data is sent to your accounting program so you are always in compliance and in possession of full visibility into the health of your business.