Who can you count on as Tax Goes Digital?
Is your business ready for the Government’s Making Tax Digital initiative?
The proposals for a major reform of the tax system were first announced back in 2015, and the introduction of the first phase is now only just over seven months away.
This will affect companies who are VAT registered, with an income of over £85,000, meaning they will need to keep a digital record of all VAT transactions so they can be submitted via accounting software.
But all firms, including small and medium-sized businesses, need to be aware of the introduction of Making Tax Digital.
The next phase, in April 2020, is expected to effect small businesses under the VAT threshold of £85,000.
It is all part of HMRC’s aim to be one of the most advanced tax administrations, to increase efficiency and to make the tax system easier for taxpayers.
But the British Chambers of Commerce has issued a warning that many a survey it has carried out has found a “widespread lack of awareness among business communities about the switch to a new digitised system.”
It surveyed 1,100 firms and found that 24 per cent had no knowledge of Making Tax Digital, while 66 per cent had only basic knowledge or had only heard of it by name.
With such big tax changes looming for small and medium-sized businesses, many of whom have no formal financial knowledge or qualification, it could be a scary time.
So why not take some advice from a bookkeeper who has knowledge of the systems and many of the firms which are racing to develop software to help firms do their digital tax returns.
It is worth noting that there are more than 150 companies working towards providing the appropriate software – with more than 40 aiming to have their products ready by next April.
All this can be quite bewildering.
And remember, without accurate bookkeeping, a business owner has little to no idea of where their business is going.
- They won’t know if it’s currently in profit
- They won’t know if it’s about to have a cashflow issue
- They won’t know how much they are owed, or how much they owe
- They won’t know whether they are approaching any important milestones such as the VAT threshold and need to register and meet the Making Tax Digital requirements.
Why not speak to Kim at Granville Bookkeeping and see how she can help you. Call (01952) 402632 or 07814 690878, or email email@example.com