It has been well advertised that HMRC is looking to implement Making Tax Digital from April 2018; however, we will have a much clearer picture in January 2017 when HMRC provide guidance following the consultation submissions.
Making Tax Digital will use cloud software to submit quarterly information to HMRC, which will mean all businesses will need to have their bookkeeping records on a cloud bookkeeping package. As these packages are becoming more intelligent, the traditional bookkeeping services will more than likely be automated and businesses will be looking to their accountant for help to implement the systems and provide the necessary training.
When Making Tax Digital was first announced, many accountants were worried as it appeared their core compliance driven service was going to be significantly reduced. However, I personally saw it as a huge opportunity to be able to, at last, provide businesses with proactive advice to help them succeed at a cost that is reasonable. As the cost for dealing with the day to day bookkeeping will reduce, businesses will be able to afford to pay for more valuable services, such as help with their pricing strategy, a review of their internal systems and efficiency improvement suggestions using the latest technology. In addition, Making Tax Digital will enable accountants to finally deliver up to the minute financial information, financial forecasts to show where improvements can be made in the future, a complete financial review to ensure the business owner is planning for retirement, help with estate planning and finally be a virtual finance director for businesses no matter how small they are.
I’m sure Making Tax Digital will come with its own challenges, but in the long run business owners will benefit as long as their accountant has evolved their service offerings, and are experienced enough to provide the advice that business owners expect from its trusted advisor.
For further information about Making Tax Digital and migrating to a cloud bookkeeping package contact me at email@example.com.