How to maximise ‘Making Tax Digital’

17th Dec

by Nick Williams, head of UK Accountants, QuickBooks

With HMRC’s new Making Tax Digital for VAT legislation around the corner, Hull businesses need not fear the looming changes.

HMRC’s new regulation around digital taxation comes into force for businesses with a turnover of £85,000 or more inApril 2019.

The first stage of Making TaxDigital for VAT (MTD) will require all VAT-registered businesses to keep digital records and use software to submit their VAT returns.

According to the Office of NationalStatistics, there were 183,000 VAT-registered businesses across Yorkshire andHumberside in March 2018 – and there are concerns that many will be unaware of the forthcoming compulsory changes. Research suggests 41% of small business owners nationwide were still unaware of the transition as of June this year (see HERE).

Businesses need to be mindful of the practical advantages of cloud-based software and the intuitive tools available to them, not only to ensure they are MTD compliant, but to allow them to spend more time scaling up their business and increasing their bottom line.

And while change is never easy, it is important that accountants and software providers work together to communicate with business owners the options available to them, and to make the transition as smooth as possible.

Last month, HMRC launched its Making Tax Digital for VAT pilot scheme and invited more than half a million businesses to try the process for themselves.

Following our private beta, at QuickBooks, we recently completed our first successful public beta submission of Making TaxDigital for VAT, working alongside Hessle-based accountancy firm Harris, Lacey and Swain, one of the national leaders in MTD.

The accountancy firms that are thriving are those that work with their clients to deliver personalised services, ensuring that they are fully educated on regulatory changes – such as MTD – and endeavour to transform tax administration so that it’s more effective, efficient and easier for businesses.

In today’s technologically savvy world, digitalisation brings real-time insights into the operations of SMEs, and accountants are well positioned to also deliver a first-rate digital experience, so they can spend more time growing their clients’ revenue, rather than sorting through boxes of receipts.

As one of the most enterprising cities in the UK, it is vital that Hull’s business community embrace HMRC’s Making TaxDigital for VAT and speak to accounting professionals about how the initiative –though understandably intimidating for some – can in fact prompt new ways of working and create opportunities for growth.

BusinessWorks Hull and East Yorkshire spring 2021

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