writes Jane Wills, partner, Haines Watts
Making Tax Digital (MTD) is one part of the Government’s ambition to transform the UK tax system. It’s about digitising record keeping and putting in place systems that aim to make it easier for businesses and individuals to manage their taxes.
MTD begins in April 2019 with MTD for VAT. From this date VAT-registered businesses with a turnover above £85,000 will need to keep digital records and submit VAT returns using approved online software.
Coming so soon after auto-enrolment and GDPR, many business owners see MTD as another hassle and cost they have to bear. It’s not all doom and gloom. MTD is a massive opportunity to embark on a new collaborative relationship with your professional advisers and to make productive changes to the day-to-day running of your business.
Benefits worth noting:
Online accounting software enables you to automate your accounting processes, saving time and improving productivity. By working in the cloud on up-to-date financial information, your accountant can analyse your financial data in real-time and give you meaningful advice to make informed business decisions. The workflows and training that accompany many of the online tools enable you to easily on-board new staff and keep your business operating smoothly in times of change.
Better control and access
Digitising your accounting records, and other business functions, gives far better control over important information about your business. You can access data in real time and have a clear picture of how your business is performing.
Digital systems also mean employees can access data more easily wherever they are and with the right security in place, online accounting software delivers far more secure record-keeping systems.
Businesses expend huge effort ensuring that they don’t make mistakes or incur penalties for things like late filings. But, mistakes happen and they can be costly. MTD will reduce the risk of both HMRC investigations and financial penalties. For those transitioning from manual systems, the accuracy of financial data will be improved and be more consistent.
Getting more value from your adviser
Because of the efficiencies cloud accounting software provides, your professional advisers should be able to spend less time on the basics and give you more strategic advice to help boost revenue and save money. It’s driving a more collaborative relationship between you, the business owner, and your adviser which gives you a picture of your business’ financial health and enables you to run your business with greater confidence and clarity.
April marks the start of MTD. It isn’t going to go away, so embrace the opportunity to improve processes and systems in your business: we’re confident you won’t look back.
We are committed to helping business owners embrace digital change. We have teams of experts who can help you make the transition to digital systems. For more information or to contact one of our team, visit the website: