If you haven’t already realised how quickly the world is moving forward with digital revolution, then it’s time to change your game. With online banking, online food shopping, everything is now done online. Its common knowledge that when you go shopping, once you’ve paid for your item you receive a paper receipt, right? Not any more… Companies (and not just Apple) are now emailing you your receipt.
The Government is forcing businesses to go digital
Digital is not only evolving with your everyday duties but also with your business and its records. It has come to our attention that the government intends to force all businesses, large and small, to keep and maintain records electronically – They call it, ‘Making Tax Digital’, we like to call it ‘The Only Way Is Digital’!
As if you haven’t already got enough to process, the government now want all businesses to take the next step and use software to keep financial records. This will apply to all businesses, retailers, and financial sectors no matter what their level of income is. It’s not just businesses who the government is targeting. The new regime will also target the property sector, landlords who receive rents etc of more than £10,000 per year will also need to start digitally keeping records.
Is it a big positive step forward?
Although this might sound like a huge move, there’s good news – the government will provide free apps to support HMRC’s digital transformations however, this will mean extra costs and data transfer problems for business especially if they have created bespoke accounts software; or still reliant on using Excel spreadsheets for their financial record keeping.
Whilst the government may have started to push the digital transformation, businesses which have already taken steps to get their accounts and bookkeeping data and software in the cloud, are going to fare much better than their counterparts.
Here at Global Infosys we have been pushing what is possible with the current digital software to help provide a faster and more efficient service for our clients. For example we have been helping our clients to make the journey from manual bookkeeping to digital bookkeeping.
When will the government’s changes come into force?
You are probably asking yourselves when these HMRC changes will come into effect. The government have given a deadline of 2020 however most companies are expecting to switch by April 2018.
What can we expect from the changes?
Eventually we expect this to be a huge transformation not only for businesses but for HMRC itself. Many errors will occur. Under the current regime there is time for the process to ensure people pay the correct amount of tax and are submitted correctly. By moving HMRC submissions to digital the possibility for errors is high. In the long run, businesses will run a quick and efficient process with HMRC and tax paying.
This move to digital is really trumpeting the end of paper based submissions. We believe that the end of paper will be welcomed by most accountants, but it will take some time to educate clients to use accounting software and transferring data.
How will you ensure you are ready for the end of paper? Remember the only way is digital in this 21st century.