|, Cloud technology, Digitalisation, Technology|How Making Tax Digital could transform your practice

How Making Tax Digital could transform your practice

There has never been a stronger push to embrace digitalisation in the tax and accounting industry than now. Thanks to Making Tax Digital (MTD), there is an opportunity to review your current processes and service offering and embrace digitalisation. By using the right strategies and implementing the latest digital technology, your MTD preparations could catapult your practice ahead of the curve with future-proofed processes.

HMRC’s MTD initiative aims to digitise all compliance data and tax collection starting with the MTD for VAT changes which go live on April 2019. There’s only one option for accountants who wish to stay competitive in the new landscape that automation is paving the way for – going fully digital.

What is changing?

From April 2019 HMRC’s online interface where nearly 90% of VAT submissions are manually entered will be no longer available for businesses with a turnover above the VAT threshold of £85,000. It will be replaced by a page where VAT return data can only be submitted via a new API interface. This means that the only way to submit VAT data will be to use bridging software which will automatically source data from spread sheets or via online bookkeeping software.

The good news is that spread sheets are deemed compliant with MTD by HMRC. If your practice uses spread sheets to make final adjustments, you will simply need to use bridging software which will automatically locate the data needed to fill in the 9 box VAT submission.

If your practice or clients are still reliant on manual methods of data collection for your VAT returns, you’ll have to transition onto an online bookkeeping system and spread sheets.

What shall I do now?

It is never too early to start planning to ensure a smooth transition. It’s time to act now. Analyse which clients need some help to digitise their data collection for VAT. Take time to analyse which bridging software or online bookkeeping service is right for your practice. Factor in how much training your staff will need and how you’ll communicate all the changes to your clients. Learn how the new VAT system works before it goes live by joining the live pilot here.

By joining the pilot you will benefit from seeing how the new process works and what processes you need to improve before the new system becomes mandatory.

What are the benefits for me and how can it help transform my practice?

HMRC’s ambition is to create a more efficient tax system. MTD is an opportunity to reap the same benefits in your tax processes – using digital technology to create more accurate financial reports more efficiently. Using digital processes will speed up the processing time of tasks like data collection, which are completed manually. These necessary but manual tasks are expensive and time consuming to maintain.

Automation is the future of practice growth because your team have significantly more time take on more clients and to offer more high margin services to your clients such as an advisory service. Offering an advisory service in addition to fulfilling compliance tasks will allow your practice to improve profitability and help differentiate your practice in today’s competitive environment.

MTD will also provide additional revenue opportunities for practices that offer the ability to submit VAT data via bridging software for clients who currently input their own VAT data manually. Think about clients who currently manually type the nine figures into the online service. They might be concerned about the bridging software that they will need to secure to be compliant. You could offer to submit their VAT returns for them, at half the price. MTD is an opportunity to increase profitability on existing clients as well as grow your current client base.

The pace of the digitalisation of the industry is not slowing. By embracing digitalisation ahead of MTD for VAT and MTD for Income Tax, your practice will be in a better place to take advantage of other developments in technology such as AI, machine learning as they come available.

For a comprehensive guide to how you can make the transition to MTD as smooth as possible, download our MTD eBook. It includes insight into understanding the impact on your processes, a wide-ranging checklist, communication and a transition plan. Keep this guide to hand as you prepare for April 2019.

Recent articles

View by topic

2018-11-21T17:12:06+00:0021 November 2018|Categories: MTD, Cloud technology, Digitalisation, Technology|Tags: , , , |