What you need to know about MTD & how to prepare your business.
Making Tax Digital reforms, which were due to come in from April 2018, have been dropped from the Government’s Finance Bill 2017. Whilst this provides a short reprieve for SME’s, the future remains uncertain as we await the result of the next General Election to know whether MTD is likely to be raised again in the next Finance Bill.
With much speculation across businesses and the accountancy profession, Brian Palmer, tax policy expert at the AAT stated: “Whatever the outcome, I do not think for one minute that MTD will not resurface, albeit possibly in a much-altered state, enabling the UK to become one of the most digitally advanced tax administrations in the world.”
Whilst there’s no longer an imminent deadline, the drive to improve efficiency shouldn’t be due to legislation. If you need more convincing you only need to look at the fastest growing SME’s and the majority have already adopted a digital accounting process.
The changes are due to impact SMEs and self-employed individuals. To prepare for MTD businesses need to think about how they record their financial data; namely, the accounting software they use. MTD will be much easier to implement if you can seamlessly share real-time information with your Accountants to ensure that quarterly returns can be prepared and submitted.
Furthermore, understanding your current position at the click of a button will enable your Accounting team to help you make informed decisions about income, dividends and more, so you can minimise tax liabilities and plan effectively for your business and your future.
Having access to up to date information for both yourself and your Accountant will be imperative in making a smooth transition to MTD, but more importantly, will help you run your business better in an increasingly fast-paced business environment.
A simple easy to use and efficient cloud-based accounting software package* like Xero will ensure your business is ready for the implementation of MTD and benefit your business in the following ways:
- Xero gives you a clear overview of your current financial position and real time data.
- Multi-user access means it’s easy to share information with your team and your Accountant.
- It’s easy to raise & issue invoices, match payments, automate statements, reconcile with your bank account and much more.
- Xero connects everything together from your bank to your PayPal account and everything in-between.
- Secure in the cloud you can access Xero at any time with a secure internet connection – perfect for getting those returns in.
Stafford & Co are Xero gold partners, with a team of Xero certified team members; we can help you to:
- Seamlessly transition to Xero; ensuring historical data is transferred, balances are correct and making the change easy.
- Train Financial Controllers to use Xero effectively, minimising admin & improving reporting.
- Provide guidance for Directors on how to use Xero to access management information and help make informed decisions.
- Respond to any day-to-day Xero enquiries.
Find out more about switching to Xero to help improve your business, contact Stafford & Co today.
*Stafford & Co support clients across a range of cloud accountancy applications, including Xero, Quick Books, Sage One, Kashflow etc.