Making Tax Digital - getting on board and on time
If you’re a UK-based business or accountancy, you should be very familiar with MTD (Making Tax Digital). And yet for some, it still remains a challenge, whether it’s businesses who aren’t fully on board yet or accountants who haven’t brought clients across the digital divide.
MTD is being brought in incrementally to give businesses a chance to adapt. If you’re still not ready for the next phase, or you have clients who are hesitant, let’s take a look at that, whether you’re an accountant or an SME.
If you run a SME: How to tackle those blockers
Here, we’ll take a look at some mental blockers and how to confront them.
You don’t perceive it as important
“I love deadlines,” Douglas Adams once said, “I like the whooshing sound they make as they fly by.”
While the extended deadlines and incremental rollouts might diminish the sense of urgency for some, it’s important to remember that MTD in all its forms will eventually be mandatory for every business. There are a small handful of exceptions, but they are rare (plus, you’ll have to investigate HMRC’s website to find out if you’re one of them).
And while MTD is mandatory, don’t think of it as a threat or obligation; rather, it’s a chance to improve your business and change with the times.
Your accountant will enlighten you as to the importance of MTD. And they can help you take the first steps to being MTD compliant.
You’re not tech savvy / you don’t like change
A study from last year found that “fear and lack of control” were the biggest obstacles to embracing automation and change. The bad news for the sceptics and the fearful is that MTD is mandatory; but the silver lining is that automation and the cloud will make your business more efficient, secure and future-proofed. And your accountant is willing to help.
Take the time to talk to your accountant and ask any questions you have. And learn incrementally if you have the time; if you can take and send a selfie, for instance, you can use many of the key features in automation software.
Do I have to sign up with HMRC now that Making Tax Digital is live?
You do. Every business has to sign up, regardless of when the business was established, if you already use digital accounting software or if you had been filing taxes online before.
Am I compliant already?
Some businesses might think they are, if they’re already processing and filing digitally, but unless you’re registered with HMRC, you are not yet compliant.
Can I still use spreadsheets?
In short, yes, but the spreadsheets must be able to submit directly to HMRC and have to be final versions (so not shared, Google sheets, for instance). Accounting cloud-based software will make that easier.
Accountants - bridging the gap with every client
There has been some debate about where the buck stops when it comes to MTD, with some saying that it’s the accountants’ responsibility, others claiming that tech support should look after it, while others say that it’s up to the business itself to bear responsibility (many businesses do their own accounting, after all).
While it might not be fair in everyone’s eyes, a good rule of thumb is for accountants to do their utmost to ensure that they’re clients are compliant; just as they would with other tax issues.
Some clients, as you’re aware, will need more help than others. This help can take the form of tech support, reassurance or education.
Make time to help clients who are slow to adapt
Your clients will have a reason to be resistant: they’re not just being obstinate. Here are some ways to help them...
- Take the time to listen to them and find out their pain points: It might be easier to address than you think
- Tell them about similar clients who’ve made the leap (maybe even introduce them)
- Walk them through the first steps: this might be using AutoEntry to scan documents and send them to you
- Communicate the time saved in automation and the cloud
- Remind them that automation will mean fewer meetings with their accountant!
- Delegate someone to help them through it, if possible
Many businesses are now choosing AutoEntry to help them keep compliant digital records. AutoEntry works by capturing and analysing scanned and photographed images of paper documents, including invoices, bank and card statements, credit notes, bills, receipts and more, automating data entry into accounting software. Operating through a secure platform and with a comprehensive suite of features, AutoEntry is the most intelligent and cost effective solution provider in the market.
As well as helping users prepare for MTD, it helps to simplify your entire bookkeeping data entry process. By using the mobile app, you can take a photo of the document you want to capture with this data posted accurately into your accounting software. Or documents can be scanned or emailed across.
Find out more about what AutoEntry can do for you with a free trial.