Making Tax Digital: Action Points for Businesses

So far in our Making Tax Digital blog series we’ve provided an overview of the scheme, considered its differing impact on businesses and individuals and looked at points specific to VAT registered businesses (the first group to file digitally from April 2019). However, sometimes it’s good to take a more pragmatic look at what needs to be done, so we wanted to use this post to offer some practical advice. 

Check you can access your online tax account

First things first! Every individual and business has an online tax account with HMRC. Perhaps you already have the access details for this, or your accountant takes care of it for you, or you still file paper returns; checking that you or your accountant can access this is crucial, as without it you won’t be able to file digital returns. If you don’t have an account, creating one is easy, just head to HMRC’s Government Gateway page. 

Identify the right software for your business

Having the right software in place will be key to filing digital tax returns with ease. The four market leaders in accounting software, Xero, KashFlow, Sage and Quickbooks offer cloud accounting and if your business uses one already, could make for an easy transition. BTC Software and IRIS Business Software are also offering Making Tax Digital integrated software, so detailed research prior to committing to an online software provider could help you save time in the long run. We’ll be taking a closer look at software options in our next blog post, and HMRC is also expected to publish their recommended suppliers over on their website.  

Train your staff

As always, you could have the best software in place and a detailed timeline mapped out for moving records over to the Cloud, but if your staff aren’t comprehensively trained the process could become unnecessarily complex. Make sure that you have a training programme in place and that the appropriate staff know how to process invoices and receipts, pay bills and submit tax information all using the online provider. It could be that the process is very similar to before, but take some time and make use of any free training offered by the software provider to ensure that staff is well-informed on how everything works and know where to go if they need assistance.

Put together a timeline

Work backwards from the date that Making Tax Digital comes into place for your business. For non VAT registered businesses, this means the earliest implementation date of April 2020. Looking at your calendar for the next two years and putting aside time to do the points that we’ve highlighted above will help to ease the transition to digital tax filing and hopefully avoid any possible confusion and errors which ultimately result in financial penalties.

With VAT registered businesses already enrolled into Making Tax Digital, digital tax is a certainty for businesses and individuals in the UK. Becoming informed and making sure that your business has everything it needs will help ease the transition from manual to digital filing. As always, if you need any assistance with this, just drop us a line email@smithbutler.co.uk