Making Tax Digital (MTD) is a new initiative being introduced by HMRC on 1 April 2019. From this date, VAT-registered businesses with turnover greater than £85k will have to keep digital records and submit VAT returns using compatible software.
With the deadline fast looming for most, it is imperative that small businesses do not get left behind. Current statistics, from the House of Lords Economic Affairs Committee suggest that up to 40% of businesses required to make the change, do not even know about it and as such are unlikely to be using suitable accounting technology to move them into the digital age.
Liz Wild of Wild & Co Accountants in Harrogate said: “We pride ourselves on providing clients with both excellent service and added value and as such have been preparing for MTD for the last 12 months. 98% of our clients are on a digital platform and can be easily transitioned to being MTD compliant.
“As part of our strategic direction we have been offering a cloud-based accounting solution to all of our clients, ahead of the MTD deadline. We are Silver partners with Xero one of the leading cloud based accounting software providers. We have already helped transition all our clients from traditional to cloud-based accounting.”
Liz added: “It can seem daunting to put new systems and processes in place but we spend a lot of time helping clients set everything up and, once it’s done, the advantages are significant in terms of saving time and gaining greater clarity about the financial picture.”
In simplistic terms, cloud-based accounting allows businesses to be paid faster via means such as mobile invoicing, automatic reminders and online payments. It also provides the opportunity to report efficiently on how a business if performing on a real time bases allowing business owners to make more informed and speedier decisions. Of course, with digital accounting anyone can quite literally run their business from the palm of their hand with the easy-to-use Xero app.
“We would encourage all businesses to consider digital software, not just those that fall into the category required to do so by April,” she added.