With the 2017/18 self-assessment tax return deadline well out of the way, attention is now turning towards Making Tax Digital, the key element of the Government’s tax administration plans.
What exactly is Making Tax Digital (MTD)?
Making Tax Digital (MTD) is an HMRC initiative designed to make sure the UK tax system is both effective and efficient whilst being easier for taxpayers.
Effective because taxation records will be more accurate, with fewer opportunities for errors, miscalculations and even fraudulent activity.
Efficient because the automation of the taxation process will make it faster, helping businesses, accountants and HMRC save valuable time.
Easier because using the correct software, makes it easier for small businesses to record and file their tax returns online.
When will Making Tax Digital (MTD) be implemented?
From 1st April 2019 all VAT Registered businesses with a taxable turnover above the VAT Registration Threshold of £85,000 will be required to keep VAT records digitally and file their VAT Returns using MTD compatible software. In fact, maintaining paper records will actually cease to meet the legal requirements of current tax legislation.
After Making Tax Digital (MTD) for VAT has been implemented, MTD for Income Tax for those who are self-employed and those with income from property will follow, as will MTD for Corporation Tax. However, this will not be until April 2020 at the earliest.
What does Making Tax Digital (MTD) involve?
Businesses and organisations will be required to use software that is compatible with HMRC’s Application Program Interfaces (API) platform to submit information. In fact, the current HMRC online tax return services will be withdrawn for those that are affected by the new MTD rules.
What are DL Accounts Ltd doing to prepare for Making Tax Digital (MTD)?
However, here at DL Accounts Ltd we’ve been working hard for sometime to ensure that all our clients, including those who are VAT Registered, are Making Tax Digital ready and fully compliant with the new laws straight away.
As experts in Making Tax Digital our aim is to ensure a seamless transition onto MTD for all our clients, taking the stress and worry out of it for everyone. This means good news for all our clients because they’ll already be on this new digital system.
We pride ourselves on being a forward-thinking practice with a pro-active approach to meeting client needs. With the variety of software available, choosing the right package can be daunting, but the team can offer you expert advice on what’s best for you.
Traditional small business desk top software can often be tedious and restrictive, simply because it’s not available via the Cloud. This means you have to actually be sat at your desk to access it. The Cloud platform makes data and software accessible online anytime, anywhere, and from any device. This makes it much more flexible and provides an opportunity to do business on the go, saving time and money.
Adopting this on online approach to accounting means that businesses can stay connected to their data and importantly their accountants. Data is up to date and accessible in real time, and what’s even more amazing is that it can integrate with lots of other add-ons and apps. For example, here are DL Accounts Ltd we provide clients with Receipt Bank, which is an app for your smart phone or tablet, enabling you to take instant photos of receipts. Receipt Bank extracts the key data from bills, invoices and receipts, which then allows us to publish this data direct into your accounting software. Giving you less paper and lots more time.
Is the Cloud Secure?
Security of data is always a big concern, however, the Cloud is one of the most secure ways to store information. For example, with traditional desk top software, information is kept on the hard drive, so if the computer or lap top was stolen, the data would be stolen too. Storing data on the Cloud means that no one can access this data unless they have a secure log-in to the online account.
Also, imagine if there was a natural disaster or fire, being in the Cloud means business productivity doesn’t need to be affected because there’s no downtime, which is a critical part of any business contingency planning. Because all your information is safely and securely stored off site, which means you’ll be back up and running just as soon as you have access to a device connected to the Internet.
Because you get to set user permissions and access levels when it comes to Cloud based software, it’s much more secure than the old fashioned way and it means that you’re always in control. Plus it easy to collaborate with colleagues and other team members. Cloud-based software companies ensure that the security and privacy of data is always airtight. Everything is backed up automatically, updates and new features are instant and upfront business costs are reduced with upgrades and maintenance managed by the cloud service provider. Data is fluid and easily accessible so you can work smarter and more efficiently, meaning your business can thrive.