January 2, 2019
Next year will see the biggest change in tax reporting for a decade. From April 1, 2019, all VAT-registered businesses over the VAT threshold will have to submit their returns digitally.
Like GDPR, there has been a lot of noise around Making Tax Digital (MTD) with many suggesting that it’s simply another ploy to create problems for businesses. But why is MTD important? Isn’t it just another hoop HMRC is asking businesses to jump through, and another compliance issue to consider?
Well, MTD is that but it’s also a lot more. It’s part of HMRC’s aim to make the UK tax system one of the most efficient in the world – helping them reduce the amount of unpaid tax which they say numbers around £9 billion*.
As an accountant, I’ve seen a lot of changes over the past 25 years but MTD poses a unique challenge, not just for businesses but for accountants as well.
MTD will completely change the way most businesses keep their records and maintain their bookkeeping, and will also mean accountants will have to do nearly four times the work for each VAT-registered client.
A key challenge for many businesses facing MTD is the way in which their records are kept. MTD will require businesses to keep their records digitally rather than just electronically; this will prove particularly challenging for businesses that keep their records on Excel spreadsheets and on paper.
As a practice, Bailey Group has been working hard to find a solution to MTD that not only eases the transition for our clients but helps us to provide a better service. We see MTD as a fantastic opportunity to give our clients more insight into their businesses, allowing us to provide them with more detailed advice to help them grow.
We have partnered with IRIS, one of the largest accountancy software providers on the market, to provide all our clients with access to KashFlow a Cloud-based bookkeeping solution.
A unique part of our solution is a mobile scanning solution where we visit our clients once a quarter and digitise all the records on site. This helps the client make sure they are compliant with the new regulations whilst helping us ensure that our accountants are able to get the jobs done as quickly as possible.
MTD is a challenge but one that businesses can easily overcome with the right help and advice. There’s not long to go until the deadline but there is still plenty of time to prepare. My advice would be to speak to your accountant as soon as possible and if you aren’t already using software for your bookkeeping, to look around and find the best option for you and your business.