The new tax system will come into force in April 2019 with the introduction of online quarterly reporting of VAT for those over the VAT registration threshold(£ 85,000).
This initial rollout will be followed by a wider implementation of the regime in the following year, which will require a large number of businesses to provide regular quarterly updates on all of their tax affairs using specialist software.
How can businesses use technology to prepare?
Technology lies at the heart of making sure a business is ready for MTD. The systems used by HM Revenue & Customs( HMRC) will all require information to be sent digitally via its Application Programming Interface( API).
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While HMRC has hinted that a free service would be available, most see cloud accounting as the future.
There are a number of HMRC compliant software packages available to businesses such as Xero, Sage and Quickbooks, which means businesses can choose a system that suits them and their needs.
The benefits of the cloud Cloud accounting is set to revolutionise the way in which businesses handle their financial affairs and offers a number of benefits over more traditional approaches.
An obvious benefit is its ability to interact with the upcoming MTD regime, but cloud accounting also provides owners with the ability to remotely access their accounts at anytime, anywhere in the world using a wide range of devices.
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By using online accounting, businesses can easily scan or take photos of invoices and receipts – storing them securely in the cloud.
Information stored on the cloud is extremely well-protected thanks to heavy data encryption and automatic back-ups held at multiple data centres around the world.
Business can also work in real-time with their professional advisers to review their accounts and discuss concerns they may have.
The ability to import information from bank transactions also reduces the amount of time businesses spend on data entry and reconciliations.
Businesses who are yet to incorporate online accounting into their current systems need to act quickly, as it will only
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be a matter of time before it becomes a necessity of running a business in the UK. The choice of accounting software remains with business owners and there are clear advantages to moving to a cloudbased solution for day to day accounting and operational needs.
For more info: www. milsted-langdon. co. uk
advice @ milsted-langdon. co. uk 01225 904940
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