Carl Reader 17 Jan 2019 01:01pm

How to beat the Making Tax Digital deadline

New Year, new……record keeping? This is the reality for 1.2 million UK businesses as the Making Tax Digital legislation fast approaches – they now have less than 90 days until April 1st to become legally compliant

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Caption: Why your business should sort out its MTD compliance now
It’s likely that many of you are already working towards MTD compliance in conjunction with software providers – to file your VAT submissions to HMRC via integrated, automated gateways (APIs). However, figures published by the House of Lords Economic Affairs Committee in December indicated that a full third of businesses are still unaware of the new legislation and haven’t assessed how they’re going to get their house in order.

So this is my call to action – to pull your heads out of the sand and start looking at what needs doing. After all, this new legislation is going to bring us out of the 1970s and into the 21st century and enable you to compete on a global scale.

We now live in a digital age and MTD is the first in a wave of new requirements coming our way that will fundamentally change the way we work. This particular piece of legislation however is going to set a much-needed new standard for record keeping and tidy up what businesses are already required to do by law. And that’s a good thing.

Let’s be honest, no-one likes change, but keeping accurate records, regularly updating them and responding to requests for information can all be a painful and laborious process. Just how well we do it also varies from business to business – with some using clever cloud apps while others still rely on spreadsheets and even pieces of paper. Well, no more!

By streamlining and automating processes through software, MTD will radically change how much time is spent on administration, improve accuracy and provide a new level of insight into the financial performance of your clients. According to QuickBooks, 89% of businesses thrive when they have accountancy support and increased digitisation and automation of traditional bookkeeping tasks through software will allow accountants to offer value-add consultancy.

MTD will mean that businesses start using artificial intelligence and machine learning data which will generate real-time insights into your cash flow - rather than just the figures in your bank account. You’ll also be able to review funding options, forecast performance and plan for external factors like Brexit too. In short, there has never been a better time to get on top of your finances. With MTD you’ll be able to run your company more efficiently and have the same advantages as larger organisations – who have long incorporated digitalisation.

It’s time we competed better against overseas competitors too – with other countries already starting to gain an edge in these areas. Spain has a near-live reporting scheme and Poland is leading the way - with all VAT-registered businesses conducting digital filing since January 2018. We must keep up so that we don’t lose out.

As we enter a time of economic uncertainty, it’s tempting to keep your head down and just plough on – however MTD compliance is a legal requirement and one you mustn’t avoid. Take a moment to look at the opportunities that come with this legislation and it will spur you on to take the first steps to make the most of it.

Ignorance is not bliss and leaving MTD to the last minute would be unwise. Choose to evolve with the changes, embrace a new way of working and better manage your business.

Carl Reader is founder of the #BeYourOwnBoss movement and chairman of business advisory firm d&t