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Business Guide To Digital Tax

By May 29, 2019February 16th, 2021No Comments

For many businesses, the process of digital tax began in April 2019. However, with the change coming at such a fast pace, it could become a problem for some businesses to adjust without encountering mistakes and failing to record taxes accurately.

SCS Financial Management can support all businesses throughout Reigate and the surrounding areas with digital tax. If you have problems with tax online, we help manage all finances.

Adjusting For Digital Tax

From April 2019, all businesses who earn revenue over the VAT threshold of £85,000 must complete VAT digitally. With this being the first tax year this has been a necessity, there is still time for you to resolve your current tax records and get back on track with digital tax. However, if you have already struggled to adjust, you are running out of time. With the support of our accountants, we make sure you are using the correct software to manage taxes.

Although not all businesses need to complete digital tax, making the change now should prepare you for the future. The HMRC will look to impose digital tax as a necessity for all business by April 2021, even if VAT remains the only tax that must be recorded digitally. With this change coming in the next two years, being fully prepared will only improve your skills using tax online.

Digital Tax Compatible Software

It is important that when you are recording or submitting your taxes for the current tax year, you are using compatible software. There are several accounting systems that can be used with that are digital tax compliant. This means the HMRC can collect your taxes from this software as it meets all their requirements. You can use the software yourself or seek accountants to manage taxes through the right software.

Failing to use the correct software is not the end of the world. As long as there is a link between the software you use and the compatible software that must be used, there shouldn’t be an issue. Ultimately, having the right software available allows you to complete and update tax records regularly and from any location. This makes finding a suitable software very beneficial for all businesses and business owners.

Benefits Of Digital Tax

Whilst switching to digital tax may seem stressful and difficult, it actually offers many benefits. Firstly, the HMRC has advised they will be lenient with penalties where you have clearly made efforts to comply with digital tax. This shouldn’t be seen as a free pass, however, it does mean there is small room for errors that can be easily amended without receiving a fine.

Furthermore, as you are using software managing all your income and expenses, this can make financial management much easier. When it comes to submitting tax returns, the same software should have all records available. This means tax submission should be much faster and more efficient, with very little errors being made when you have the exact tax records in the software.

When Should You Make The Change?

Whilst the change for businesses over the VAT threshold should have begun in April 2019, you still have time. For businesses over the VAT threshold, it is important you make the change as early as possible. Switching all your tax records into a compatible software is the best place to start. From here, submitting your tax returns becomes much easier. Once this is done, you do not have to worry about other taxes being submitted online until at least April 2021. You can rest easy until this change is implemented.

When your business does not reach the VAT threshold, there is no necessity for you to submit taxes online. However, the best option for your business is still to switch to digital tax as soon as possible. Not only does this prepare you for when digital tax does become a necessity but it will also help your business save time and money when managing finances and taxes.

Contact Us

For more information on digital tax or to contact qualified tax accountants for support, get in touch with SCS Financial Management. Our team offer a fast response to all clients no matter what services you require. Covering Reigate and working throughout the surrounding areas, you can always depend on us. Call 01737 373707 today or fill in our contact form to make an enquiry.

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