Digital record keeping
The MTD initiative aims to push the accountancy industry to truly embrace digitalisation, improve efficiency and reduce human error in tax submissions.
HMRC estimates that £9bn is lost in tax due to genuine human errors when preparing tax calculations. One of the ways in which these errors can be eradicated is to improve how efficiently financial records are prepared. Many businesses currently keep manual records of invoices, receipts and cash takings. Digital record keeping will be a fundamental part of reducing the opportunity for error.
Once you have begun to move your manual bookkeeping clients to a digital system, it is a good opportunity to look at your internal processes to see if you can improve how efficiently your practice operates.
The accountant of today needs tools and effective workflows that will transform their services and unlock time for growth and new revenue. One option is to consider online tools to save time and increase efficiency.
Spreadsheets and MTD
A key component of MTD is digital record keeping and migrating businesses and individuals over to using bookkeeping services to improve the accuracy of their records. Where does that leave us with spreadsheets?
In July 2018, HMRC released its final addendum to the VAT notice which states that spreadsheets can continue to be used. Spreadsheets are for the time being a form of digital record keeping. The continued use of spreadsheets should allow the transition to MTD to be more straightforward, with advisors able to maintain their current VAT calculations they have today within spreadsheets. HMRCs final VAT notice is a valuable resource to refer to. Click here to view the notice.