Choosing your Making Tax Digital software
As we move forward into the digital era, more initiatives are being put in place for businesses to make digital-first choices. A key example of an initiative designed to embrace technological change is the introduction of Making Tax Digital (MTD).
From April 2019, businesses with a VAT turnover of more than £85,000 have been required to submit their tax records online and although the changes are intended to benefit HMRC, there are huge benefits for businesses in keeping your records digitally.
You will need to decide which online accounting solution to use – the main ones are Quickbooks Online, Xero and Sage. At a minimum these should be able to:
- Create digital records of paper receipts
- Automatically calculate the tax your business owes
- Update transactions every day, keeping you on top of bank reconciliation
- Pull transaction data straight from your invoicing software, point of sale (POS) system or your bank
There are huge benefits for businesses in keeping your records digitally.
The costs of the different products varies – the choice depends on what you as a business owner requires from the software. Monthly profit and loss reports, amounts due to you and by you are all options as well as basic bookkeeping and VAT returns are generally included, additional add-ons include stock control, budgets and payroll.
Many accountants, including ourselves at KM, host the digital product as part of a packaged service, which includes bookkeeping, VAT returns, management and year end accounts as well as payroll. This enables you to concentrate on running your business and leave the finance function to the experts.
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