Making Tax Digital – what you need to know….
Analog to Digital… it’s on its way!
The UK Government is overhauling its Tax Administrative Strategy and bringing some of their streamlined solutions down to the S.M.B. (Small to Medium Businesses) to help reduce the Tax errors. The new initiative will mean that many businesses will have to turn digital to keep records up to date.
Over the past few years, we’ve seen a number of new software applications enter the market, such as QuickBooks and Xero and many other's. These news applications are ready to help businesses become compliant. With the move to being digital and applications here to support small businesses, the traditional January rush should be a “thing of the past” along with late fines.
What are the benefits of this new strategy?
Before Digital Tax, many individuals and small businesses didn’t get their Tax right and suffered unnecessary fines. The new strategy is to help small businesses keep on top of their Taxes and be correct (greatly reducing the number of fines).
For many businesses, this will also mean the ability to link business applications directly with finances, so the flow of information is almost in real-time and less of a burden on the business to have someone processing the information. This could mean increased productivity and another step in the Digital Transformation that so many businesses are going through.
Losses and Errors.
With more regular, small and consistent updates, the number of errors should be greatly reduced. Capturing more errors and reducing losses, this will create a better margin for many businesses.
All records can be sent digitally to HMRC, which will speed up the process.
Unless you are exempt or have applied for special measures, your business will automatically be applied to the Making Tax Digital strategy.
Useful Links for further information:
- HMRC recently published evidence of Making Tax Digital and reducing the tax gap
- Find out more about how businesses have benefitted first-hand from Making Tax Digital
- Acceptable software find software that works with Making Tax Digital for VAT
- Step-by-step guide Making Tax Digital for VAT step-by-step guide for agents
From a quick Google search {other search engines available} these are the top for results:
Xero - Accounting Software for Making Tax Digital
Quickbooks - Making Tax Digital Software
Sage – Stress-free Making Tax Digital for VAT software
Anna – Free MTD VAT spreadsheet templated for Excel