Accountancy in Luton – Major Benefits of Making Tax Digital
As an Accountant in Luton helping clients with their personal and business taxes, making tax digital is a good way to start in order to provide the best tax preparation service for your clients.
Making Tax Digital is an initiative by our government here in the UK intended to bring the UK tax system into the 21st century by helping to provide businesses with a more streamlined and modern system to keep their tax records to make the HM Revenue & Customs (HMRC) more knowledgeable about taxes coming into their system.
The HM Revenue and Customs (HMRC) stated that the main goal of making tax digital is to make tax administration services more efficient, effective and easier for tax payers.
Our entire world is turning to a very large digital system, so you as an accountant in Luton must be able to adapt to this and also help your clients adapt to these changes.
The first business structure to be affected by making tax digital here in Luton, UK are small businesses and individuals with above the Valued Added Tax (VAT) threshold of £85,000 (eighty – five thousand pounds) who are required to preserve digital records for valued added tax (VAT) purposes from April 2019.
The HM Revenue and Customs (HMRC) is executing this initiative and working closely with accounting software developers to make sure that taxpayers are able to make the switch to digital tax. The outlined changes apply to a wide range of taxpayers, including most businesses, micro-businesses, self-employed people and landlords, as well as individual taxpayers.
The truth is that, making tax digital is essential in help your client keep track of how much tax they owe, it can also help you as the accountant in filing tax returns of your client all through a financial year.
Other importance of making tax digital include:
Reduction in human errors from data input
Providing more accurate information of taxes and tax returns all through a financial year
Better the relationship between tax payers and the HM Revenue and Customs (HMRC)
Making tax payment more easier to understand
Provide tax in real time
Better use of information
How Can Accountants in Luton Help Clients Tap into Making Tax Digital?
The fact that the HMRC is striving towards making tax digital does not mean that they have software to offer tax payers to help them report their taxes, so it is the duty of accountants, or accountancy agencies in Luton.
The aim is for helping clients with their personal and business tax returns to have partnership with the Intuit QuickBooks and some other software companies and firms in order to help their clients manage their accounting records more easy wherever they are.
The following groups have been confirmed by the HMRC to be exempted in the initiative of making tax digital.
Unincorporated (stand-alone) businesses and landlords with annual sales below the £10,000 threshold
Excluded for those who cannot use digital tools due to either religion, disability, age, or any other reason stated.
Making Tax Digital is a key part of the government’s plans here in Luton, UK to make it easier for individuals and businesses to get their tax right and be at the top of their affairs.
It should be known that businesses will not be mandated to use the Making Tax Digital for their business system until April 2019 and also that the system of making tax digital will only apply to businesses who have a turnover above the VAT threshold – the smallest businesses will not be required to use the system, although they can choose to do so voluntarily.
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