Making Tax Digital (MTD) 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 – ultimately paving the way to the end of the annual tax return for millions of businesses and individuals.
The first businesses to be affected are those who will be caught under Making Tax Digital for VAT (MTDfV) which comes in to force in April 2019.
HMRC’s ambition is “to become one of the most digitally advanced tax administrations in the world, modernising the tax system to make it more effective, more efficient and easier for customers to comply.” There’s little doubt that MTD will bring a radical change businesses from April 2019, but is it all bad?
MTD for VAT is going to add huge value to businesses across the UK with its massive opportunity to increase efficiency, standardise processes, reduce errors and enable more proactive tracking and reporting.
By submitting tax digitally via cloud accounting technology, businesses can gain real visibility and control over their data and become better integrated with the industries in which they work.
Some of the opportunities include:
- Cloud technology is moving from a nice-to-have to a must-have: current statistics indicate that small businesses who use cloud technology are less likely to fail after the first five years than those who don’t. The benefits of cloud technology are being recognised by more businesses and with HMRC spearheading this transformation, we’ll see an ever greater number of businesses moving to the cloud, so they too can benefit from access to real-time data, increased efficiency and better cash flow management.
- A paperless system means fewer costly mistakes: Through digital tax returns, errors will be rectified faster and tax payments should become more accurate.
- Making Tax Digital for VAT is the gateway to smarter technology adoption: MTD will ultimately drive widespread adoption of digital technology, bringing new capabilities such as artificial intelligence and automation into the hands of many. This means that they can spend less time on the books, freeing them up to focus on running their business.
So whilst MTD will be a challenge for many, businesses that look beyond the initial ‘pain’ to the opportunities that can derive from cloud based solutions and go into the process with an open mind will undoubtedly be better as a result.
At Burgis & Bullock we’re running a number of free MTD briefings and demos of the latest cloud technologies. Simply go to our events page to find an event near you and sign up today, or call our expert team on any questions about MTD on 0345 177 5500.