Making Tax Digital with Xero and Tanda
Getting your taxes right costs money, but getting them wrong costs even more. Last October, the HMRC hit some of the UK’s largest businesses with fines for ‘careless behaviour’, totalling £59m. Some 115 Finance Directors and other senior finance executives failed in to comply and were also fined. Often, these errors result not from an […]
13 November 2018 |
Getting your taxes right costs money, but getting them wrong costs even more. Last October, the HMRC hit some of the UK’s largest businesses with fines for ‘careless behaviour’, totalling £59m. Some 115 Finance Directors and other senior finance executives failed in to comply and were also fined. Often, these errors result not from an intent to deceive, but from inaccuracies in the submitted tax returns. The UK government has taken steps to rectify this problem. Most recently, they announced the Making Tax Digital (MTD) programme. The MTD, which will begin on 1 April 2019, is an HMRC initiative designed to make it easier to get taxes right. By next year, all VAT-registered businesses with a turnover above £85,000 will have to keep digital records and submit VAT returns using MTD compliant software. Already, UK businesses are expressing concern about their readiness, noting that many are not even aware of the impending change. So how can your business ensure that you are Making Tax Digital? How can you avoid opening yourself up to investigation and fines come 2019? Out with the old, in with the new According to HMRC, 1.8 million businesses still file manual returns. They, along with everyone else using non-MTD compliant software, will need to transition as soon as possible. And with less than six months to go, time is quickly running out for large and small businesses alike. Recent RSM research, carried out by YouGov, suggests that a third of businesses are still unprepared for the new MTD rules. Businesses still using Microsoft Excel and manual records are going to be the hardest hit. Meanwhile, industry pundits are also worried about the complexity of the online process compared to the manual completion of VAT returns, and the costly software upgrade involved. Even if the business fails with record keeping, they must still have an API linking the business’s accounting software with HMRC from the start of the compliance period, to avoid being fined. There is no way around it: businesses will need to choose their MTD-compliant software and fast. Read more: The Digital Workforce Success Revolution: Why you need to shift to cloud-based HR today Making Tax Digital with Xero and Tanda The HMRC released a list of VAT Compatible Software, and Xero is among the select few that already have the right system in place. One of Xero’s biggest drawcards in the transition process towards MTD compliance is their ability to onboard businesses. They can onboard any company smoothly to new methods of digital tax management. In fact, they have done this is other parts of the world that have adopted similar initiatives. Xero is not new to the game and is also able to integrate with other workforce technology platforms. In the UK, Tanda is making a name for itself not just for seamless end-to-end integration with Xero other accounting software, but also for its wide range of features. Tanda sends timesheets to Xero in a ready-to-export format. This automatically updates leave balances in the process. This means less time worrying about compliance. Managers can spend more time focusing on growing the top line and engaging teams. With Tanda, you’re not only getting easy integration with VAT Compatible Software. You’re also getting all the tools you need for a successful business. Moving with change, effortlessly With the UK government’s efforts to streamline processes and take advantage of the digital age, as well as the numerous tax changes to be implemented over the next few years, the cost of not switching to VAT compliant software is high. Most accountants and managers will agree that the initial investment in MTD compliant software is more than worth it. Besides avoiding fines, these changes help in the long run to create sustainable and scalable businesses. The many software options out there can make it difficult to decide which one can help you transition the fastest. But MTD is just the beginning. There will be more and more changes to come, and they will affect all businesses no matter the size. It’s now up to businesses to select the best software that provides not just MTD compliance, but also other tools that will help them navigate the new, increasingly digital UK business landscape. To learn more about how Tanda can Make Tax Digital and what else we can do for your business, join us at Booth B36 in Xerocon London on 14-15 November 2018.