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Top Tips to Get Ready for Making Tax Digital

Are you ready to lead your business with the latest tax management system set up by HMRC? The beginners may find several challenges in the process to file returns as there are several technical hitches in the process. Well, the latest Making Tax Digital is here to make the process easier for you. HMRC reveals that tax revenue of almost £9 billion is lost every year just because of the incorrect submissions. It is believed that the shift to digital tax payments may reduce these losses by a considerable level while capturing all business activities in the United Kingdom at a single platform. 

HMRC launched the first cycle of MTD during the month of April this year and their main focus was on the VAT businesses that have estimated turnover of £85,0000 or more. As almost 12% of the businesses in the United Kingdom prefer filing VAT returns with manual procedures, it is important to do more careful planning for shifting the process to the online platforms to ensure long-term benefits. The great news is that this move may also benefit businesses with enhanced cost saving which is predicted to be more than £17,000 on annual basis. 

It is observed that business efficiency and cost-saving are some of the major driving factors for the wide adaption of digital tax payment systems via cloud-based platforms. However, if you are a beginner in this field, you may need some advice from experts to get ready for making tax digital. Don’t worry! Here we have listed few tips from experts to help you proceed ahead with this process:

Tip 1: Start now


If you own a small business and you are currently not using the cloud accounting software, MTD could be something that you need to kick start with the digital accounting methods. This is one of the most trustworthy opportunities to boost your productivity within the well-designed digital accounting process. Therefore, the first most thing you need to do is opt for this method right now so that your journey ahead with your business can be easier.  

Tip 2: Register your business for VAT

In case if your business is already VAT registered and the turnover is above £85,000, you must have already gone through the first phase of MTD. But in case if your business is not registered with VAT and you are just approaching the threshold, it is good to invest your time in MTD and to meet VAT requirements as soon as possible. You can take help from experienced digital accountants in your area to breakdown the complex process into small sections. MTD does not just help businesses to file their returns digitally; instead, it is a reliable solution to store your VAT information digitally while using the right software tool. 

Tip 3: Get MTD compliant software


In order to proceed ahead with your returns, you should get making tax digital spreadsheet software. This modern age accounting software can help you to track cash flows, schedule payment reminders, and raise invoices from time to time. It is the most trusted tool to boost the operational efficiency of business while ensuring easy submission of VAT returns. You should also consult a team of experts that can guide you throughout the process. Experienced accountants are already aware of the legal issues in the process and can help you find safe ways to manage business accounts in the long run. 

Tip 4: Review your MTD plan

 If you are already using accounting software to manage your business, it is better to check with your software provider whether this tool is using the latest MTD version or not. Moreover, as HMRC is going to roll out few more updates in near future to handle the tax system, make sure that your software will be updated from time to time. On the other side, if you are working with spreadsheets, then also you need to ensure that your technique complies with the latest MTD guidelines. 

Now you have gone through the necessary tips and tricks to lead your business with MTD requirements. The professional accountants and reliable software tools may help you throughout the process with ease. 

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