Making Tax Digital is officially here. And though some are still wary of this introduction, there are many benefits to for those who will be using the new process:
More businesses will go digital
You can officially wave goodbye to that shoebox full of receipts as all businesses will now need to record these online. Research from 2018 showed that only a third of businesses use a software to record finances but the introduction on Making Tax Digital will bring the rest of these businesses into the 21st century by providing a streamlined digital portal for receipts to be held safely in one place.
Getting online can bring growth
One of the biggest benefits to come from digitisation of businesses is potential growth. It’s estimated that using bookkeeping software can lead to an average revenue growth of 20% and when businesses use three or more cloud tools, this can rise to a potential 25%. This demonstrates that alongside being streamlined and compliant on tax affairs, businesses can also progress further.
Fewer tax mistakes
Tax mistakes can prove very costly. And though everyone strives to avoid errors, the smallest mishap or a late submission can lead to a penalty.HMRC reports state that avoidable mistakes cost the Exchequer more than £8bn a year, with £3.5bn lost because of VAT returns alone. Making Tax Digital aims to reduce this dramatically, benefiting both businesses and the economy as a whole.
Better relationships with accountants
The introduction of the new process will allow clients and accountants to build stronger relationships. Accountants services will be much more valuable to clients who need assistance to transfer all their finances online.
Tech-savvy accountants will be able to provide a more accurate service and therefore fill the client with more confidence that they are receiving the best possible service.