In our opinion, Making Tax Digital (or for brevity’s sake, MTD) is something to be embraced rather than feared.
As with any legislative change, the new MTD reporting rules have forced businesses to reflect on whether they are compliant and what they need to do to ensure they stay on the right side of the law. Just as importantly, however, it presents an enormous opportunity to reflect on how well they understand their business and what they can do to not just comply but take advantage of the changes.
Here are our top 5 reasons why your business should welcome MTD with open arms:
As we all know, time is money and your time is precious, particularly if you have a business to run.
Bookkeeping is no longer the arduous task it once was, as cloud accounting software significantly speeds up processes that were once very time consuming. Tasks that used to take hours can now be done in a matter of minutes thanks to the convenience of automation.
MTD will make having to sift through stacks of files a thing of the past because all information will be in one place, accessible anywhere in the world via a computer, phone/tablet or smart device.
Many cloud accounting software subscriptions can integrate with hundreds of different types of software you may already use, such an online banking, further saving you time.
Better understand your business
One of the real benefits of MTD is that it will enable you to see a much clearer and more accurate picture of your business.
By analysing real-time data instead of historical figures, you and your accountant can work together to make more informed business decisions that are based on the most accurate and up-to-date data available.
Financial data is far easier to report on when it’s in digital form, so you’ll benefit from clear, easy-to-understand reports that will prove invaluable when making key business decisions.
Avoid penalties, interest, surcharges
Once MTD comes into full force, it will be much easier to avoid infringements with HMRC. MTD is all about simplifying the tax system through digitising it, therefore it stands to reason that a simpler system will make it easier for taxpayers to submit returns on time and ensure they are better aware of what needs to be paid.
Reduce errors and the threat of investigation
One of the huge benefits of an automated tax system is that, well, it’s automated. Even the best of us are liable to make mistakes, so a digital tax system effectively eliminates the possibility of human error.
Furthermore, with your accountant granted easy access to your information, they can identify any errors before any submissions are made, reducing the risk of dreaded investigations by HMRC!
Paperwork. It takes up so much space! How much of the space in your office is consumed up by drawers, filing cabinets and storage containers? Once MTD comes into effect, physical records will no longer be required, making them a thing of the past.
Overall, it is far more economical, practical and environmentally friendly to have a digitised tax system.
So, there we go! Those are our top 5 reasons for why we believe Making Tax Digital signals a positive change and should be embraced.
If you would like to discuss any of the matters mentioned in this article further, then please get in touch.