A Huddersfield-based chartered accountants, Sheards, ran a survey in October to find out how prepared people were for Making Tax Digital, and cloud accounting.
The results found that 29% of businesses are ‘completely in the dark’ about what they need to do to ensure they comply with next years’ Making Tax Digital legislations.
Making Tax Digital (MTD) is to be imposed in the UK from 1st April 2019 for all VAT registered businesses with a turnover in excess of £85,000.Their VAT returns will need to be submitted from within accountancy software as logging onto HMRC and ticking the relevant boxes will no longer be an option.
The recent research has prompted worrying suggestions that many could be unprepared for the MTD revolution.The results showed that just one third stated they were “well prepared” for April 2019.Only 42% of the respondents used cloud accounting, and 20% were thinking of migrating to cloud accounting software. Half of the respondents said that if their accountant suggested they switch to cloud accounting, then they would take their advice and migrate.All this shows positive thinking towards moving with the times.
So how should you prepare for the digital tax revolution?
Sheards’ Director, Kevin Winterburn, says, “It’s not as daunting a prospect as people may think, and I’d actually implore people to embrace the change as it will have many benefits.
“Between now and April 2019, there’s lots of things businesses can do to prepare for Making Tax Digital.It’s important to have a healthy, coherent relationship with your accountant. They should be able to advise you on the features of Making Tax Digital, and how best to make the transition from manual to digital.”
Kevin also stresses the importance of software compatibility.
“From April 2019, any businesses affected by the tax digitalisation must use MTD-compatible software in order to file their returns. Not using software won’t be an option anymore, so businesses must use software that can connect to HMRC systems via an Application Programming Interface (API).
The Making Tax Digital scheme will be mandated for all on 1st April 2019, but businesses are advised to introduce MTD software before the deadline for maximum preparation and a smoother transition. Sheards are hosting monthly workshops to inform and advise businesses on MTD, https://www.sheards.co.uk/news/events/archive/article/2018/September/your-invitation-to-our-making-tax-digital-workshops-are-you-ready
Following the survey, a respondent was randomly picked out and the winner received a gift box of Prosecco and Truffles.