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Why Bromborough businesses need to prepare for Making Tax Digital

Bromborough and the wider Wirral is certainly a digital and internet-savvy area. In September, the peninsula became one of the UK’s first regions to join Openreach’s ‘Fibre First’ initiative. It’s no surprise, therefore, that most local business owners are aware of the upcoming changes to the UK VAT system.

They know that from 1 April, 2019, the vast majority of VAT registered firms will need to keep their records digitally. VAT returns will also need to be submitted using software. This change is part of the government’s Making Tax Digital (MTD) initiative.

MTD will eventually affect all UK businesses

If you are not VAT registered, you do not need to worry about this particular change right now. However, you still need to be aware of and understand the Making Tax Digital initiative. At some point in the relatively near future, you are going to be affected by this government project.

HMRC’s aim is to have all tax-related data recorded digitally, and for all returns to be done using software. In time, all taxes will be paid this way.

Why it’s wise to prepare early for MTD

Leaving yourself plenty of time to get ready for this change makes business sense. It is far easier to adapt to change when you are not working to a tight deadline. By implementing the procedures you will need to make early, you will ensure that your processes are working properly when the change becomes mandatory.

This will enable you to meet all filing deadlines, and continue to provide HMRC with accurate information. Failure to do this can result in fines, and putting things right will be time-consuming and potentially stressful. Fortunately, it is not going to be too difficult to make the necessary changes and your Bromborough accountant will be able to help you to do so.

Choose the right software

The biggest change you will have to make is using software to record your business transactions and expenses. If you are still using manual ledgers, you will need to purchase the necessary software and train your staff to use it.

However, not all software is compatible with the HMRC system. Therefore, before you buy something, you need to double check that it is suitable. You can find the advice you need to do this via the website. Your accountant will also be able to help you.

If you are a business that already uses software for your accounting tasks, it is wise to check, now that it is compatible with the HMRC system. Should you discover that it is not, you will be able to switch to a new software package to solve this problem. Double checking now gives you the chance to budget for this additional expense and shop around for the best deal.

Start preparing your staff for MTD now

The MTD imitative means that you will have to change the way you work. It is wise to start preparing your staff for this change as soon as you can. Making them aware of it and helping them to see it as a positive thing can be done today, if you haven’t already.

Once you have identified the software you will be using, your staff can be trained. Doing this in advance and in a structured way will ensure that the move to keeping digital tax records goes smoothly.

Posted by Mark
January 7, 2019

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