Making Tax Digital (MTD) continues to be a hot topic, especially after the Government’s recent announcement of a delay to the proposed start date. However, just because the timetable has been pushed back, now is not the time for businesses to be complacent – in fact, there couldn’t be a better time to consider moving to a digital accounting system.
Last month, the Government announced that it had deferred the introduction of MTD – the HMRC initiative that aims to completely digitise the tax system for all businesses and individuals with a secondary income in excess of £10,000. The original proposal called for MTD to be rolled out by 2020, marking the end for the established annual tax return, in favour of a new, quarterly reporting regime. Under the revised plan, only businesses with a turnover above the VAT threshold (currently £85,000) will need to keep records digitally from 2019 and then only for VAT purposes. Other businesses will not be required to keep digital records until at least 2020.
Some may be tempted to postpone their plans to digitise until MTD becomes mandatory, but this could be an opportunity lost. When it comes to migrating over to a cloud system, it can take a while to get used to the software, train up on how to use it and spend time with your accountant making sure your system delivers what it needs to. MTD is on its way, whether we like it or not and HMRC’s expectation is that all businesses will be required to utilise appropriate software by the time MTD becomes mandatory. Whilst this is at least two years away, there could well be a spike in demand for MTD-compliant software as we get closer to the deadline, so can your business afford to be caught up in the rush, as well as having to deal with the transitional issues?
On a positive note, the right cloud accounting system should prove an invaluable tool for business owners – 24/7, real time access to your financial data, snap shots of your business performance from any internet-connected device, seamless collaboration with your accountant and no need for separate backups.
Digital is not the future, it is very much now and it will give your business a cutting edge. If you are interested in hearing more about cloud accounting, Wilkins Kennedy is ideally placed to help. Contact us today to find out more information.
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