According to research by IRIS, the accountancy software firm, nearly 47% of businesses are using bookkeeping methods not fit for purpose for the upcoming Making Tax Digital (MTD) changes.
What Is Making Tax Digital?
Making Tax Digital is the government’s strategy to reduce processes involved in tax administration by collecting data in real-time directly from sources such as a businesses accounting software, employers, banks, other governments departments and so on.
The plan is to eliminate the need for once per year tax returns, instead individual tax payers and businesses will have a single online portal populated by the information from these sources so you can see your tax liabilities in real-time instead of waiting until the end of the year to know how much you will need to pay.
Am I Ready?
Businesses and those who are self-employed will have to update HMRC at least quarterly which will be done primarily by using accounting software, however, with 22% of businesses not using software at all to manage their accounting records and many more not using software that will be up to task, the transition to MTD will be arduous at best and chaos at worst.
But there is GOOD NEWS for Bright Horizon clients! As we already use the best digital accounting software on the market, the move to MTD will be a seamless and pain-free process! But, if you’re not a client and would like to talk to an accountancy practice working at the forefront of technological change and adoption, you can contact us here.