We’re sure that, by now, you’re more than familiar with the phrase ‘Making Tax Digital’. Whilst many people are well aware that a change is a’coming, they have little to no idea what that actually means for their business.
With an astonishing 82% of the adult population now claiming to use the internet daily, this new government initiative endeavours to finally help the VAT process take advantage of 21st century technology, improving the experience for both business and HMRC alike.
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As well as making humongous improvements to data accessibility, the Making Tax Digital initiative also drastically improves data protection - preventing confidential information from ever reaching the wrong hands. As information will henceforth be kept digitally in the cloud, and accessible both via mobile and desktop computer, there will now be no tangible records to ever risk compromising. Talk about secure.
Enough about that, though. We're sure you're far more interested in establishing what is actually required of you and your business come April 1st, 2019. Well, we're glad you asked...
As of the next tax quarter commencing April 1st, all VAT-registered firms with an annual turnover of £85,000 or more must now turn in all of their financial information via compatible accounting software. Businesses will be required to purchase and begin inputting tax return data to a digital system, and finally make the whole process paperless.
In fact, many of the arduous accounting activities that for years have taken up far too much time, energy and literal storage space can now be completed using a simple 9-box input format on compatible software! Things such as payroll, inventory and even financial projections are about to become a whole lot simpler.
That's right, your chosen software will now only require a minimum of four financial inputs over the course of the year to automatically submit all necessary info directly to HMRC. That not only means that you'll easily have access to consistently accurate reports, but you'll also be able to monitor your tax situation as it happens. That means you have the luxury of gaining a far better estimation on looming tax bills and saving you any nasty financial surprises at the close of each tax year. In the cold light of day, even the most traditional of companies will have a hard time denying that the benefits of MTD are countless.
Of course, this is a lot to take in and we've encountered many paper-based companies that are frankly feeling the pressure in the face of the these new regulations, and not knowing quite how to embark upon this new scary chapter.
At Valuewalk, we're also aware that with such a big change looming, it's easy to feel bombarded or overwhelmed with information (some of it useful, and some not!) and that often many firms are left feeling quite unsure of the months ahead. What does this mean for how our company will run? How will we adapt? What really is required of me here?
That's exactly why Valuewalk have made it our business to gather all of the need-to-know info to help you and your business not only adjust to the necessary changes, but thrive during the digital switchover.
We've collaborated with Quotegrab to shed a little light on the matter, so whether you need advice on compatible software options, want to know if you qualify for a deferral, or even just have additional questions in the name of thorough MTD research, Valuewalk are on hand to walk you through the process step-by-step.
Here is absolutely everything you should be prepared for, come April 1, in light of new Making Tax Digital regulations...