What is Making Tax Digital? 

In April 2019, HM Revenue & Customs (HMRC) introduced their first phase of Making Tax Digital for VAT registered businesses. 

There are two elements to the new Making Tax Digital (MTD) for VAT rules. These are:

  • a requirement to keep business records digitally
  • a requirement to file the quarterly VAT return using API (application programming interface) enabled software 

Despite the increased awareness of MTD regulations, 50% of businesses are still not ready for MTD, with 30% still in the planning stage and 20% yet to begin preparations, according to a report by Tax Systems. Switching to cloud accounting software, like Xero, will enable you to get compliant and dodge the risk of a penalty! 

What will HRMC now know about my business? 

HMRC have invested large amounts of money in tax inspectors gearing up for the MTD change as they have a greater chance of catching businesses with poor or misleading record keeping, without the need to sift through manual and paper records. 

In our latest event, Making Tax Digital will make or break your business, we will be looking at why the changes to the tax system benefit HMRC and how they use this new system to collect a vast amount of information on businesses trading in the UK. We will explore how the information gives HMRC a bigger picture of businesses in your industry as well as your business specifically. 

Why are people abandoning desktop products? 

Desktop packages are finding it hard to keep up with cloud packages as they are restrictive in getting effective updates to their customers. This has now driven the price of desktop software up without customers seeing any benefit. 

What is the cloud? What are the benefits?

The cloud is changing the way we live and work. Cloud accounting gives you greater flexibility over your accounts, a higher level of protection for your financial data without an additional cost and the power of the automation meaning you can spend more time doing what you do best.

How can I use accounting software to maximise profits? 

Having regular understanding and analysis of your financial data in real time will allow you to make key decisions and unlock the potential for growth in your business. Additionally, with Xero’s add on apps, you can manage all areas of your business in one place, including payroll, stock, debt collecting, customer relationships and so much more allowing you more time to work on growing your businesses. 

What does the future hold now we are entering MTD? 

MTD doesn’t just affect VAT registered businesses. By April 2021, MTD will be extended to capture all businesses. It is uncertain yet what information HRMC will be collecting on businesses at this point, but you’ll need time to be prepared. 

We’ll be answering all of the above in more depth and helping businesses who are not yet compliant with MTD for VAT at our latest event: Making Tax Digital will make or break your business on Thursday 13th June 2019. Spaces are running out fast! So secure your spot today by filling in our sign up form here. 

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