A digital deadline is looming for businesses above the current £85k VAT registration threshold.
By April, businesses in that bracket will be required to keep their records on digitally compliant software for VAT purposes.
It’s likely that smaller businesses will have to do the same fairly soon thereafter under the terms of HMRC’s Making Tax Digital (MTD) initiative.
In essence, it means most businesses will have to move on from desktop or manual record-keeping and use an online accounting package if they don’t already do so.
This change in approach from HMRC represents the latest step forward in the evolution to digital reporting and cloud-based systems.
It may represent a step change for organisations used to – and comfortable with – conventional practices and processes. But if it’s something businesses are required to do, they’d be as well to make the most of the opportunities that this new accounting landscape will offer.
The introduction of cloud accounting software brings greater clarity. You have much greater visibility of your financial status at any given time and your everyday systems – from invoicing to sales and purchase tracking – are endowed with greater efficiency. The ease of access allows greater monitoring of financial performance and the opportunity to offer timely advice.
Other advantages include the digital transfer of data for year-end accounts, greater simplification of tax reporting and the potential to reduce costs by resolving any issues online through remote access rather than a face-to-face meeting for a relatively straightforward query.
It’s a technological trend we’ve been acutely aware of at Meston Reid & Co for some time. We understand the obligations it brings – and we see that, out of necessity, comes an opportunity to make your business support services even more productive.
We’re already certified to install and operate a number of cloud accounting software solutions which are digitally compliant and specifically designed for small and medium-sized businesses.
We supply and set up state-of-the-art cloud-based, accounting software packages. Our cost-effective and flexible options for various requirements are available right now, and can include initial setup, licence fees, training and expert backup.
MTD represents a new obligation for businesses – but there’s a digital dividend for them if they go about things the right way.
Mark Brown is a partner at Aberdeen-based chartered accountancy and business advisory Meston Reid & Co