Making tax digital and the benefits of management information - Published: 21 August 2017
HMRC plans to make tax digital from 2019 (per HMRC’s new timetable) albeit initially the only obligation will be for VAT purposes and then only for businesses above the VAT threshold. However, it is likely that further obligations will then follow for other business taxes.
The planned mandatory date of April 2019 may seem a long time away but ensuring your business records are ready to comply with the new reporting system should be done as soon as possible. For example, business records will have to be maintained digitally through approved software or apps. The accuracy of the ongoing information that will be required by HMRC is vital to meet your legal obligations. The plan is for businesses to submit summary information to HMRC on a quarterly basis through a digital tax account with an end of year submission also required.
The new guidelines also represent an opportunity. Monthly reporting should already be in place within your business and if it isn’t you may be giving an advantage to your competitors. Accurate, timely information is key to assessing your performance and how efficiently you operate which then impacts on whether you are structured correctly. If you do not currently have access to monthly Management Information (MI) you should and the sooner you start the better. It will be mandatory to file quarterly records in less than 2 years anyway so why not start using MI effectively now for the benefit of your business?
Those businesses that continue to ignore the importance of MI will not only struggle to meet their legal obligations in the future but will also give away competitive advantage. Investing now in a structured, bespoke system of financial reporting, analysis and forecasting can only make your business stronger.
For a review of your current MI and how we can help to improve please contact us today on 0844 818 0078.