When you run your own VAT-registered business, it’s vital that making tax digital VAT returns process is as smooth and efficient as possible. That’s why it’s important to migrate to the digital system on offer by HMRC if you haven’t already done so. VAT-registered businesses with a turnover of £85,000 and above were required to do so as of April 2019 and now the process and systems are being rolled out more broadly.

Why switch to MTD for VAT returns

There are plenty of benefits to making tax digital for VAT. Here are some of the key advantages for businesses.

1. It saves time

Manual record-keeping on paper is time-consuming and cumbersome. But the online MTD (making tax digital) system is slick and submissions are fast and simple. By switching to a digital system, you also reduce paperwork and the cost required to manage paper filing systems.

This also frees up office space so that you can optimise the utilisation of your facilities, rather than wasting money on large storage facilities. Many businesses are still wasting resources by keeping their paper records, and it’s notoriously hard to keep on top of paperwork, especially where legacy files are involved. All too often this means hiring expensive off-site storage units where there is little chance of the relevant paperwork being successfully retrieved at a later date.

Modern businesses go digital and print off hard copies when they need them. It’s better for the environment as well as for business.

2. Enhanced productivity

Lloyds Bank calculated in 2019 that the productivity gains to businesses of transferring to the digital system were equivalent to a full day of business administration. When you free up staff time with MTD you can focus your staff on more valuable activities that deliver a higher return for your business. The time needed to train and get up to speed with the new MTD system is minimal, so it’s well worth the investment.

3. Reduced stress

It’s much easier to submit your tax return online as your data is saved and you can access guidance and help whilst you’re online. You’ll receive prompts before your due dates for submission and you can access training videos and a wealth of helpful information. You can also see your submissions for previous years at the touch of a button. This is far less stressful than trying to complete paperwork and get it sent and received in time.

4. Better accuracy

When you switch to making tax digital VAT returns, you benefit from a higher degree of accuracy because the system will flag any errors that occur as you progress through the system. By checking previous submissions, you can also notice any trends and you benefit from having a higher volume of data at your fingertips for management information.

Conclusion

So if you’re business isn’t yet benefiting from the making tax digital system, now is the ideal time to experience it and to migrate to achieve the benefits. If you’re keen on saving time and money, enhancing productivity, and accuracy and promoting a stress-free working environment, this is a valuable move for your business.