Becoming Making Tax Digital compliant
The cloud accounting space has been growing rapidly in the UK, predominately focusing on accounting software, but also operational software designed to help make businesses run more efficiently and effectively.
There are many reasons why you should consider moving to cloud-based systems, such as cost savings, security, flexibility and reliability.
The Cloud and Making Tax Digital
You will struggle to find a more commonly used acronym than MTD (Making Tax Digital) in the cloud accounting space at the moment. MTD is the name given to HMRC’s digitalisation process for filing and reporting your tax obligations. The principle behind MTD is to remove manual intervention when transferring accounting records to HMRC and to digitise accounting records held by UK businesses.
MTD has become synonymous with the cloud, as in most cases cloud software will allow UK businesses to become MTD compliant at a lower cost point than if they were to implement more cumbersome record-keeping systems previously.
Using a SaaS (software as a service) model, businesses pay a monthly subscription which includes software updates and maintenance, remote storage and new innovative features designed to drive efficiencies. In turn, this can minimise or stop the need for a substantial cash outlay for the software, setup and server updates etc. Coupled with the other benefits indicated above, it’s not hard to see why more businesses are choosing to move to the cloud.
Cloud software will solve the two problems posed by the first instalment of MTD:
- Submission of your VAT returns to HMRC;
- Maintenance of digital records to the correct standard dictated by HMRC.
Whilst most software providers will be compliant with the record keeping side of MTD, businesses that may have a filing problem are those using:
- Old software
- Bespoke/niche software that hasn’t been updated for MTD
- Multiple accounting systems (e.g. separate front end/back end systems)
- VAT groups
- Excel spreadsheets
To solve this issue, we have developed our own bridging software for clients. This software allows the submission from non-MTD compliant systems to HMRC.
Our cloud team have specialist knowledge and can provide a range of services, including system implementation and training.
To find out more about our bridging software or how we can help your business become MTD compliant, get in touch with one of our advisors on 01903 234094.