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.