Wednesday (7 August) is the first filing deadline for businesses with an April to June VAT quarter since HMRC’s Making Tax Digital (MTD) initiative became mandatory.
This means this week marks an important milestone in your relationship with the taxman as it’s most likely your first MTD filing.
There have been lots of scare stories from accountants trying to generate work from the initiative, when in fact Making Tax Digital is a positive and ambitious move by HMRC to bring everyone in the business community into the digital era.
While critics of MTD bemoan it as being extra red tape for overworked business owners, the reality is that it will give you the tools you need to better manage your finances.
At Ozlop we saw a flurry of activity around MTD when the regime went live in April with many clients coming to us confused about what it meant. Many were concerned that they would be forced to buy expensive MTD-compliant software, which would have little benefit for their day-to-day operations.
My message to them was clear: rather than being a burden, MTD is a blessing because it will get you up to speed with modern working techniques and force you to embrace the digital era.
By coaxing you online and away from cumbersome spreadsheets or desktop software downloads, with digital reporting the taxman is helping you to stay on top of your finances. If you are new to Cloud accounting software, it will be similar to your current bookkeeping routine, the only difference being that this software is accessed via a browser.
You will probably find it a lot better, with handy time-savers such as your bank feeds being imported and payments reconciled automatically and the ability to photograph expense receipts and upload them automatically via an app.
When it comes to filing VAT returns, when you are ready the software will automatically connect to HMRC, replacing the need to input it all over again via the HMRC portal.
When you’re running a business, recording bills and receipts can seem a less pressing job than meeting an urgent deadline or troubleshooting the latest problem. And yet it needn’t be such a big challenge, and if it is proving a burden then Ozlop is here to help reduce the effort required to maintain your accounts.
We understand that bookkeeping can be time-consuming, so Ozlop helps minimise this while pinpointing small troubles before they turn into big problems.
If you need help adjusting to MTD, get in touch and let’s discuss how we can help.
David Vine – small business specialist and Managing Director at Ozlop, the bookkeeping specialists for owner-managed businesses