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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