As Making Tax Digital for VAT officially took its crown as the newly implemented tax system of the United Kingdom in 1st of April, 2019, it’s time to know the possible impact it might create not only in the world of business and taxation but as well to the people involved in it.
This is in great expectation for the business society to easily weigh in if the newly enforced digitised tax system will either be a help or an additional burden to the business and taxation community. Moreover, for tackling this, taxpayers, accountants, and people who are responsible for meeting certain tax obligations will be able to prepare earlier for the probable downsides of the MTD for VAT.
To this extent, this article equally jotted down the foreseen advantages and disadvantages of the Making Tax Digital for VAT. Read further to know more about the UK’s new and digitised tax system.
One evident factor of how Making Tax Digital for VAT boosts productivity in the workplace is that it tremendously and apparently lessens the paperwork. Since MTD for VAT is in digitised form, taxpayers, accountants, and agents will no longer need to spend long hours or days going over papers and printed receipts.
Taxpayers, accountants, agents, and other people involved in meeting tax duties will now have more time and energy to equally divide their day-to-day tasks with the help of Making Tax Digital for VAT. The decrease in the number of printed documents and piles of papers on tables are anticipated.
If you’re one of the people responsible in complying with the tax duties, then MTD for VAT is a great help to lessen your time in either recording or filing of the needed documents. The digitised tax system is highly tailor-fitted for a better, easier, and faster filing and recording of tax reports.
Promotes compelling accuracy
If the previous tax system requires a physical spreadsheet for recording and filing tax reports, there’s a high tendency for errors and miscalculations. However, with the existence and help of MTD for VAT, these errors will no longer prolong the taxation process.
Because Making Tax Digital for VAT also promotes high accuracy in the filing, computing, and recording tax reports. It’s now easier and faster to detect errors with the use of the new and advanced tax system – which is way more beneficial for the part of taxpayers, accountants, and agents.
It lowers stress in the workplaces
Since it’s said that MTD for VAT will be able to track down errors on-the-spot, the taxpayers, accountants, and agents will now be stress-free and worry-free. With the help of carefully chosen and tested bridging software, the filing and recording process is now better and easier to manipulate.
There’s no need to dive into tons of paperwork on the table and drown with hundreds of cups of coffee because with the trusted accounting or bridging software, you’ll now be filing and recording the tax reports in a digitised form – much better and faster.
Eradicates loads of paperwork
Since meeting tax duties will now be digitally done in the United Kingdom, it’s greatly expected that workloads and paperwork will eventually be eradicated. It is explained that with MTD for VAT, filing and recording process will be done online with the use of trusted and MTD-compatible bridging software.
With that, papers and pens will be set aside and computers will take part in the process. It’s a good point for the part of taxpayers, accountants, and agents, since seeing loads of papers is evidently stressful especially when there’s a situation of missing documents or misplaced receipts – so much headache by merely thinking about it.
Possibly lowers the company’s tax bill
The MTD for VAT gives taxpayers an ample opportunity to go over their tax records anytime and anywhere. In this case, it’s beneficial for the fact that it will be easier to check on the amount of your tax bill giving you the chance to save and take a pause in spending money.
Taxpayers will now be given a chance to track down their finances and where did their money go. It’s some sort of a nudge to see if you’re tax bill is still acceptable or tolerable or if it’s already not.
When talking about the disadvantages of the MTD for VAT, the digital exclusivity comes first in line. This downside refers to the people who are for some reason will not be able to comply with their tax duties in a digital format.
The big question is, why? It’s understood that there is still part of the community who aren’t knowledgeable enough in manipulating high technology devices. Moreover, there are also people belonging in religions with beliefs against the use of digital devices or technology in general.
Additional deadlines in line
One thing that might be a disadvantage for the part of taxpayers, accountants, and agents is that MTD for VAT now requires submitting tax records on a quarterly basis. This is far different from the traditional or former tax system in which taxpayers are only mandated to comply with their tax duties annually.
Kath Ramirez embraced the dream of being a writer since she was in 4th grade. She took it seriously and she’s now a graduate of AB Journalism and a current writer to Australian and United Kingdom-based companies. 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.