This new method of online business tax preparation and submission is going to be implemented soon! Come April 2019, the first phase of changes will begin the transformation of the tax system. But, what does this mean for businesses? The Glasgow accountants from The Kelvin Partnership will help you through.
Online Business Tax Preparation Changes – Making Tax Digital
Making Tax Digital (MTD) software will change book keeping practice forever. As we mentioned in this blog post, the UK government’s scheme is dedicated to digitalising the way businesses and individuals manage their taxes.
What does MTD mean for business practice?
If your business is VAT registered, you must use digital tax software for keeping records and for VAT invoices. Don’t currently use VAT software? The 1st of April 2019 is fast approaching, so you best start planning what programme will be the easiest for your business to integrate!
Makes Bookkeeping More Efficient
Being online, the whole process of preparing and maintaining accurate records should be made easier. This will ultimately mean that your company’s finances are submitted in a more efficient manner compared with keeping physical records.
More Environmentally Friendly
Though you may be sceptical of the HMRC initiative, MTD doesn’t mean you can’t keep your own paper records as well. In the first few years of digital tax submission, you can easily keep a physical copy if you feel more comfortable. However ultimately, it is a goal of HMRC to make the tax process paperless and so, more environmentally beneficial.
Improved Communication Between HMRC and Your Business
Lastly, online business tax preparation and submission software will also make for a faster, more direct way of communication between your business and HMRC. If you feel like there may be a mistake on your VAT return, or if you just have a question, there is the option to contact HMRC via web chat or a secure messaging service.
An accountant from The Kelvin Partnership can help your business if you’re worried about the changeover. Our team have years of experience and knowledge!