How will Making Tax Digital benefit your business?

How will Making Tax Digital benefit your business?

in Sage August 21, 2018

Making Tax Digital is the most fundamental change to the administration for at least 20 years as HMRC aims to become one of the most digitally advanced tax administration in the world. BY April 2019 all businesses that have ever been over the VAT threshold (£85,000) will be expected to submit VAT returns digitally via an HMRC compliant ERP software package.

This is only the first stage of Making Tax Digital with the overall campaign being designed around 4 key goals. Once implemented fully MTW will allow the HMRC to: 

Make better use of businesses information. 

Once information has been submitted to the HMRC once, businesses will not have to supply that information to the HMRC again. Furthermore, the HMRC will no longer require businesses to supply information that it can get from elsewhere i.e. from employers, banks, building societies and other government departments.

By creating Digital Tax Accounts, HMRC is providing businesses with the means to see all the information that the HMRC holds on them and be able to check that they are correct at any time. This information will then be used by the HMRC to tailor the service they provide to each business's individual circumstances.

Allow businesses to see their tax in real time. 

The HMRC believes that customers should not have to wait until the end of the year or longer to know how much tac that they should be paying. As such MTD will allow the MTD to collect and process information affecting tax as close to real time as possible, to help prevent errors and tax due/repayments owed building up. 

Provide a single financial account for each business.

Fed up of having to look in multiple places to see all of your liabilities and entitlements? HMRC is changing that by introducing a single financial account where businesses will be able to see a comprehensive financial picture similar to using an online banking account. 

Allow the digital interaction with businesses at a time to suit them. 

The digitisation of the HMRC will allow businesses to interact with the HMRC digitally at times that suit them. Your digital account will offer an increasingly personalised picture of your tax affairs, helpful advice and support through web chat and secure messaging. Furthermore, all-digital record keeping software will be linked directly to HMRC systems, allowing direct communication between the HMRC and your business. 

Need more information?

If you have any further questions regarding Making Tax DIgital or would like to check if your Sage systems require an update to be compliant with the latest Making Tax Digital guidelines, please contact us at enquiries@tms-scotland.com.  

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