How will Making Tax Digital benefit you and your business?
The Making Tax Digital scheme has been in the pipeline for a number of months now and in 2019 it will finally be rolled out in full effect.
Making Tax Digital aims to benefit all businesses and individuals that need to use HMRC for tax and self-assessments. In a digital age, it is about time that HMRC steps fully into digital services for its customers. It has been in talks since 2017 and has been put on the back burner whilst we’ve navigated through a rocky political landscape.
We have pulled together a few of the key ways that Making Tax Digital will benefit you and your business, and what you can expect in 2019.
Introducing mandatory MTD VAT service
From April 2019, Making Tax Digital will be mandatory for VAT services. This means that if you have a business with a taxable turnover above the VAT registration threshold, you will need to start keeping digital records from April 2019 and will be asked to submit these through digital software.
If you aren’t tech savvy, this may seem like an unnerving step, but you will start to notice how much easier submitting your records in this form will be in the long run. You will no longer have to frantically gather all of your paper records in order to submit them to your accountant or HMRC directly, instead, you will only have to ensure your software is up to date and then submit your digital records.
Making tax easier – the benefits of Making Tax Digital
From November 2019, all businesses, no matter whether they are above or below the VAT threshold, will be required to submit their tax records digitally. This means by 2020 all businesses will be Making Tax Digital.
The idea behind Making Tax Digital is to make the process easier and quicker, preventing people from missing deadlines or submitting their self-assessments incorrectly.
All you need in order to benefit from Making Tax Digital is a reliable piece of accounting software or an accountant that is familiar with the service. Where you once had to spend hours filling in self-assessment forms, you will now be able to send HMRC all of your information with just the click of the button.
For startups and small businesses, this can help to save a lot of money, as you greatly reduce the risk of late payment fines or submitting an incorrect assessment.
Going digital can increase your revenue
There has been talk that going digital can help increase your business revenue by 20% and those that use 3 or more of these cloud-based pieces of software can increase their revenue by 25%.
Digital software is not only saving businesses time and money, but it is also giving businesses a better overview of their finances, allowing them to spot pressure points faster and understand their financial standing better.
Overall, Making Tax Digital will allow businesses more control over their finances and save time when it comes to admin. These small changes to digital will have a big impact and we will start to see the effect of these come April 2019.