No more paperwork to worry about, real-time tax information and fewer mistakes that cost your business money are just a few of the many benefits your company will enjoy after switching to Making Tax Digital.
How Switching to Making Tax Digital Can Help Your Business
From the 1st of April 2019, all UK businesses that have a taxable turnover above the VAT threshold of £85,000 need to use the government’s Making Tax Digital (MTD) service to keep and submit records digitally. It can seem a little overwhelming and confusing, but once you’ve made the switch, you’ll be able to take advantage of some of the key benefits of MTD.
1. Less Paperwork to Worry About
If you dread the annual sort through of receipts, invoices and documents, then Making Tax Digital (MTD) will make your life a whole lot easier. Switching to MTD-compliant software allows you to keep an eye on all of your business’ incomings and outgoings online. You’ll just have to check that all of the data is right and update it each quarter. No more irritating piles of paperwork.
2. Fewer Mistakes that Cost You Money
Tax returns are time-consuming, complicated and once submitted, there’s no guarantee that they’ll be 100 percent correct. If you happen to miss the deadline for filing your tax returns, then you’re hit with a fine depending on how late you were.
An estimated £3.5 billion is lost because of VAT-return mistakes alone. Once you’ve switched to MTD-compliant software, you’ll never have to worry again about avoidable mistakes.
3. Going Digital Means Easier Bookkeeping
Digital bookkeeping is so much easier than traditional methods. You’ll be able to keep track of tax dates, repayments owed and upcoming bills in seconds just by logging in. Having immediate access to financial information allows you to make informed business decisions and stops any unwanted surprises from creeping up on you.
Using software gives you access to other digital tools that can benefit your business, like data analysis and growth caused by the cloud. Many small businesses see accounting as a yearly inconvenience that needs to be dealt with so you can get on with running your business.
MTD can change that view, allowing for small businesses like yours to get a handle on their finances, and the chance to modernise and simplify their systems. With these tools and information, you’ll have everything you need to take control of your finances and encourage growth.
4. More Time to Focus on the Important Stuff
There’s nothing worse than having to deal with financial updates and tax returns when you’d rather be focusing on a major project or new customers. MTD saves you valuable time that can be better spent on other aspects of your business.
It’ll be fast and easy to log in to your account and find all of the information you need or add your latest figures. Gone are the late nights when you frantically tried to find all of the invoices and receipts you needed to get your returns in on time. With MTD, you’re able to sit back and relax, safe in the knowledge that everything’s been sorted.
5. Always Have the Funds Needed
If the date for tax returns sneaks up on you and you don’t have the required funds available, then you could still be in trouble even if your business is in great shape. MTD ensures that you’re kept aware of important dates, such as when you’ll need to pay tax bills.
This means that you won’t transfer funds for other purposes just before you need to pay tax bills. You’ll always have the money you need to keep the taxman happy.
6. Real-Time Tax Information
Rather than having to wait until you submit your tax return to view important information, you’ll be able to keep an eye on things throughout the year. Once the 1st of April 2019 has passed, information will be processed during the full 12 months.
This means you’ll have a better understanding of what you owe, so you can have everything in order long before the deadline for tax returns arrives. The more informed you are, the better the decisions you make for your business will be.
Everything You Need to Know About Making Tax Digital
To make sure things don’t get too confusing when it comes to MTD, we’ve put together a quick and easy-to-understand summary of everything you could possibly need to know. Some of the key questions answered in the guide are:
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What is MTD?
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Why is it being enforced?
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What are the penalties for not complying with MTD?
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What do I need to do as a small business owner to prepare for MTD?
For the answers to these and other important questions, make sure to download your free copy of our Getting Started with Making Tax Digital guide using the link below.
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