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Tax & Accounting28 January, 2019

Preparing for Making Tax Digital for VAT: The time is now

With the 1st of April deadline of Making Tax Digital (MTD) for VAT looming closer and closer, by now you might have a good idea about what is changing and how it is going to impact your practice. The real question to ask when preparing for MTD for VAT is, where do you start?

Now that you have a clear vision of what changes you will need to adopt, the time to embrace them is now. Adopt this step by step process to support this transition.

Step 1 – Analyse how your practice currently submits VAT returns.

If your practice is already using commercial bookkeeping software, think about how you’ll manage to keep on top of multiple systems.

How many bookkeeping packages are you managing on behalf of your clients? How will you train new employees on multiple bookkeeping systems?

Are spreadsheets currently part of your VAT process, how do you intend to continue using the data contained within these as part of your transition to MTD? The good news is you can continue using spreadsheets as HMRC accepts them as digital record keeping. Find out how this can be a logical first step to embracing digitalisation. {link}

Step 2 – Are you using manual processes?

If your practice is still using HMRC’s online filing service, take these steps. Analyse how many clients over the VAT threshold you have which are currently not maintaining digital records. The sooner you can get them transitioned over to maintaining their accounts (or your practice doing this for them) the better. Understand what role spreadsheets play in the VAT process across your client base.

Step 3 – Communicate internally

Inform your practice about the changes which will be happening. Consider any additional software resources and training which you may need. Set a timetable for activity. Make executives responsible for adhering to the programme.

Step 4 – Communicate with your clients

Communicate what changes will be coming on board in relation to how they capture the data and how submissions will work moving forward. Introduce them to a solution that meets their needs for the purposes of digital record keeping. Use MTD as an opportunity to send out monthly email communications on what changes will be required, what support you can offer and what additional services you can provide.

Step 5 – Ask for help

Although MTD is set to revolutionise the accountancy industry, compliance can be relatively straightforward with the right planning, preparation and software. Partner with the MTD specialists at Wolters Kluwer who are ready to help you with every step of the process.

We’re experts in providing information, software and services to tax executives who work in complex, compliance-driven environments.  Our innovative and mobile technology provides the information that tax, accounting and audit professionals need to make accurate decisions, comply with legislation and to increase the efficiency of their operations. We support our customers by offering expertise from our in-house team of finance professionals, ex-accountants and developers.
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