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Digital Tax

A Guide to Bridging Software for Making Tax Digital

By December 1, 2020February 16th, 2021No Comments

Things are changing for taxpayers because of Making Tax Digital. If you don’t want to switch from using spreadsheets or your favourite accounting software, using bridging software to adapt is a great investment. 

With the new Making Tax Digital scheme, a lot is changing with the system for keeping financial records. Taxpayers and accountants who have been used to a certain way of doing things and have invested in accounting software want things to be as similar as possible. Some already have to follow the new regulations but for income tax, there are still a few years left to prepare. 

Our specialists at SCS Financial Management are available to advise clients on Making Tax Digital and bridging software. We also provide a range of financial management services to suit your individual needs. 

What Is Making Tax Digital?

Making Tax Digital (MTD) is a UK government initiative that aims to make tax administration more efficient and easier for taxpayers. This scheme is already essential for those above the VAT registration threshold.

By April 2023, all sole traders, partnerships, and landlords with a turnover of over £10,000 will need to use MTD compatible software for their accounts and returns. 

How Bridging Software Helps You

Making Tax Digital bridging software allows you to keep financial records in a spreadsheet document using software like Excel or Google Sheets. Then, using the program you can submit the required information to HMRC from the spreadsheet. 

There must be a digital connection between the software you use for keeping records and MTD software. This is because you cannot just copy and paste the final figures like you once could on HMRC’s VAT portal. 

Bridging software is perfect for you if:

  • Are an individual and do not want to switch from using spreadsheets soon
  • Have to deal with complex accounting needs
  • Have accounting software that is not compatible with MTD

Software For Making Tax Digital For VAT

When choosing the right bridging software to help you adapt to MTD it is important to make sure it will do everything you need. Look at this list from HMRC’s website of suitable digital program suppliers. 

Call our experts in Reigate, Surrey for accounting advice and financial management services on 01737 373707.