5 reasons why Making Tax Digital (MTD) is a positive move for business

Nobody likes being told what to do, not least by the tax man, but Making Tax Digital (MTD) is happening (in April 2019 for most businesses) and save for a few exemptions, your business will have to do it. The big change is that you have to send information to HMRC on a quarterly basis and you must keep records digitally.  But we think that encouraging (well insisting) that businesses take a more 21^st century approach to accounting will have big benefits for business. Here’s just a few of them:

It’s actually quicker

If you’ve not yet moved to digital accounting, then this may feel like a giant leap. Systems such as Xero will do this in a far quicker way than ever before so it needn’t take you that long. In fact you will actually save time on bookkeeping. So complying with MTD will actually save you time!

You’ll claim more expenses

We’re not talking about spending more but if you have to make more regular submissions, you’re less likely to forget the odd expenditure here and there. With modern software such as Xero you take a snap and upload receipts straight away. So you’ll potentially save money.

Less mistakes – so better value from your accountant

Digital accounting software is so user friendly and you’re less likely to make mistakes with entries. So when it comes to year end there’s less work for your accountant meaning they can spend more time with you on the business strategy.

Real-time business performance indicators for better growth

By keeping your accounts up to day, you can get a real time view of how the business is performing and get an early heads up on potential cash flow issues, or on big cash influxes. In turn, decision making will be objective, thus easier and you can improve growth and profitability.

Better long term planning

With up to date digital accounts you’ll be able to get your annual accounts up to date, therefore you’ll know well in advance what your tax bill will be and can plan for payment – but as with point 4, you’ll be able to make plans for the year ahead at the start of the year, not halfway through it.

If you want to take the opportunity to move to digital accounting or just want help understanding how Making Tax Digital works, then give us a call on 01628 770 770.