Now that Making Tax Digital is officially operating as the UK’s new tax system, it’s time to delve on to further details. The MTD is an initiative of HMRevenue and Customs, UK government’s non-ministerial department, to finally set the long-running tax return aside.
April 1, 2019, is a remarkable day for the UK’s business and taxation community as the MTD officially landed in its throne. With the current tax system, almost all VAT-registered businesses that fall in the scope of the VAT threshold which is currently £85,000must submit their tax obligations digitally.
With that, it will be discussed what are the several features that MTD offers to limited companies that fall right in the scope of the initial VAT threshold. However, take note that every MTD bridging software provider has its own and special features offered for the agents and/or clients.
Brief Introduction toMaking Tax Digital Is
The Making Tax Digital is more like a light at the end of the tunnel for both the UK government and the HM Revenue and Customs. It is their foreseen finest and major catalyst to effectively shut down tax return.
This is in a great aim for making the current tax administration more effective, more efficient, and simpler for the UK’s taxation community. Also, MTD is the expected key to make the HM Revenue and Custom’s desire to be included as one of the most digitally progressive tax administrations in the world.
What is an MTD bridging software
‘Bridging software’ or an ‘MTD bridging software’ is considered as HM Revenue and Custom’s term for the digital tool or instrument that links the clients’ tax information with the HMRC’s system.
This allows the HMRC to monitor the clients’ tax information the easier and faster way. Moreover, HMRC is meticulously working with different software providers to ensure the quality of bridging software that the clients may soon be considering.
MTD Features Offered To Limited Companies
The following features are the ones offered for the UK limited companies. However, there are a variety of MTD bridging software providers that are probably offering their distinctive features.
· Bulk matching in the bank
In bookkeeping, reconciling the bank is the most significant factor. There are bridging software providers that effortlessly making it easy for taxpayers by consenting bulk matching of same transactions.
· Automatic invoice
One more feature that might be expected from MTD bridging software is an automatic invoice. This refers tothe direct creation of an invoice from the bank statement.
An auto invoice effortlessly savescustomer tons of time and sweat on a ‘self-billing’ arrangement or even those that don’t mandate an invoice. From the bank transaction, several clicks and an invoice will be created and matched right away.
· IR35 Calculation
The contractor industry is consistently changing due to complex regulation. Fortunately, there’s MTD bridging software that offers inside and outside IR35 calculations. The calculations will be based on the consignment and automatically make related journals.
· Bulk VAT completion
With the help of MTD bridging software, filing VAT returns across a client in one click is possible. This helpful feature cuts-off days of work. There’s no need to go over and over through client’s tax histories to file quarterly returns.
· Bulk payroll
Considerably, many customers’ weekly or monthly payroll doesn’t change. With the right MTD bridging software, clients may expect to easily run the payroll for all workforces through all companies with merely a couple of clicks.
· Bank Feeds
This feature that might be in one of the MTD bridging software available connects to clients’ bank account and pull bank transaction into the bridging software on a day-to-day basis. This eliminates time-consuming bankimports.
As the UK’s Making Tax Digital continues its journey in the tax administration, there are more possible changes that may take place. And the stated MTD bridging software features above may innovate from time to time.
However, this is in great respect for the MTD-compliant bridging software providers on how they’ll be transforming their software for the convenience of the customers. Definitely, it’s a complex act to analyse MTD in merely a day or two that’s why different sectors or companies are extending their efforts in great hope that the UK government and HMRC’s initiative will succeed without being a burden to the taxation community.
Kath Ramirez embraced the dream of being a writer since she was in 4th grade. She took it seriously and she now writes for My Digital Bridge, a smart, cloud-based accounting software provider in England and Wales. Aside from writing, Kath also keeps herself busy spending time with her family, cherishing the role of a mom to 3 dogs and a puppy, reading random books, and diving into the world of photography. She’s not even a pro to whatever she’s engaged into right now, but one thing she knows, she’s happy and that’s more than enough.