There is one thing that cannot be denied in the wake of the Coronavirus pandemic and that is, digital agility is essential for both your personal and professional life. We have all needed to adapt how we live and how we operate business and this applies to tax administration. The government initiative of making tax digital means you do not have to worry about physical paperwork, you will get access to real time tax information and fewer costly mistakes.
All UK businesses that have a taxable turnover above the VAT threshold of £85,000 need to use the government’s Making Tax Digital (MTD) service to keep and submit records digitally. In making this switch you will be able to take advantage of the key benefits.
1. Less Paperwork to Worry About
You probably dread having to sort through all your receipts, invoices, and documents every year. MTD-compliant software means you can keep an eye on all your incomings and outgoings online. All you have to do is check that all the data is right and up to date each quarter – no more bothersome paperwork to sift through.
2. Fewer Mistakes (that Cost You Money)
Tax returns are complicated and time consuming and there is no guarantee that they will be 100% correct when you submit them. You are also subject to fines if you miss the deadline for filing tax returns. MTD-compliant software means you will never have to worry about such easily avoidable mistakes.
3. Going Digital Means Easier Bookkeeping
General bookkeeping is much easy when conducted online rather than using more traditional methods. Tax software means you can log on and easily track tax dates, upcoming bills and any repayments owed in seconds. You can make informed business decisions quickly and there will be no nasty surprises creeping up on you. This is one of many ways you can modernise and simplify your systems – by streamlining your accounting through digitalisation, you can save valuable time that could be better spent on other aspects of your business. There is nothing worse than financial updates propping up when you have projects to work on or new customers coming in that need your attention. But now, you will be ready for anything because all your tax and financial information will be stored and sorted for you.
4. Always Have the Funds Needed
It is easy to lose track of the dates and have tax returns sneak up on you when you do not have the necessary funds available. This can be a huge problem even if your company is a thriving one. You will never lose track of important dates with MTD meaning you will always be prepared when it comes around.
5. Real-Time Tax Information
Instead of waiting until you submit your tax return to view all the important information, you can keep an eye on things all year. This gives you a better idea of what you owe and means you can have everything in order long before the tax return deadline hits, and it is much better for making informed business decisions.