Making Tax Digital (MTD) is a key part of the UK Government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs.
With avoidable mistakes costing the Exchequer over £9 billion a year, HMRC (Her Majesty's Revenue and Customs) want companies to introduce software to store their digital VAT records and send returns using MTD-compatible software. Transposition errors will be avoided as the information is sent directly to HMRC from the digital records and the improved accuracy that digital records provide will reduce the amount of tax lost to human errors. This initiative came into effect on 1st April 2019.
Our invoice processing automation solution, Kefron AP, can help your business reduce the time pressure to hit the MTD tax return deadlines, by reducing manual data entry and eliminating human errors, all whilst giving time back to the business.
To learn more about MTD or Kefron AP, please select one of the options below.
Making Tax Digital is an initiative developed by HMRC in a bid to reduce the number of tax lost on a yearly basis. The vast majority of VAT-registered businesses with a taxable turnover above the VAT threshold (£85,000) will be mandated to keep digital VAT records and send returns using Making Tax Digital (MTD)-compatible software from 1st April 2019.
Following the UK Government announcement in 2017, MTD will not be mandated for other taxes until at least April 2020, but businesses can get involved in the Income Tax pilot now on a voluntary basis.
Businesses will need to use software to keep their business records digitally. This may include dedicated record-keeping software or a combination of software packages or spreadsheets.
As of 1st April 2019, software that prepares a VAT return to send to HMRC must be MTD-compatible for those mandated to use MTD from this date. This means that it can integrate with HMRC systems to send VAT returns to HMRC. From April 2020, data must be exchanged digitally between all software used by a business for VAT.
Making Tax Digital is another important step by HMRC to streamline business tax collection by digitising the process. One of the challenges this raises for businesses however it that the process of extracting the required data from business records in the form of paper or pdf invoices is still manual and error prone.
Kefron is here to help.
Our cloud-based solution, Kefron AP, enables the easy digitisation of invoices as well as the extraction and validation of data for direct insertion to the target finance system. With only clean validated data going into the finance system it greatly increases the accuracy of reporting and HMRC tax returns.
With the ability to sync with any accounting software, Kefron AP speeds up the entire process, reducing time pressure to hit the MTD tax return deadlines as well as saving time for the business.
The reality is that businesses are now obliged to process tax returns and keep digital records. Using an MTD compatible accounting software solution is only half the battle. An Accounts Payable Automation solution ensures that invoices are converted to digitised records and the data they contain is properly captured for more accurate and easier digital tax submissions.
To find out more about Kefron AP, contact us today or sign up for a free demo.
UK businesses will need to ensure that their existing Accounting Software will be compatible with Making Tax Digital. Most Accounting Software solutions are either already compatible or are working to become compatible by the April deadline. A list is provided on the HMRC website.Kefron AP has the ability to sync with any accounting software, allowing the quick for the fast and simple exchange of information. Examples of the ERP systems that Kefron AP can easily integrate are shown below.