Whether to the accountant or the client, for MTD to be successful, you will need to acquire good software ideally. However, with the vast number of adverts for solutions out there, it can be hard to decide what solution would work best for your business. That’s why it’s important to be careful when choosing the right MTD software.
Here some things you should consider before buying the MTD software:
Approval by HMRC
When choosing the right software, you will need to ensure it meets the HMRC criteria. The software must do everything you need it to do. The software should have a ‘IXBRL’ tagging that is recognized but HMRC and should allow direct submission to HMRC and companies house.
The software should have updates and in-built development.
MTD will be rolled out on April 1st; this will undoubtedly be the start of a long journey to incorporating the software into any business. The HMRC will, no doubt, for the foreseeable fortune make recommendations for changes. Therefore it’s important that the system you choose to use can be adapted to any required changes. As the government and HMRC learn the process, they will be making the necessary changes. When you choose a vendor to work with ideally, they will need to work closely with the HMRC. When you hire a system developer, remember to negotiate on the price and include any ongoing updates.
Your business has different structures and will need a system that is going to accommodate all of them. You don’t want to have different systems for different functions. Its also important to understand that not all solutions would support LLPs, partnerships, and sole traders seamlessly; therefore, the software solution you choose should meet all your business needs.
With the introduction of MTD in April, you will need to remember that you will need to complete a tax return four times a year, which could involve more work when preparing VAT returns. You’ll need an efficient system for data integration so that you protect your margins and are in control of the to-do- list. The software should integrate data from payroll, accounts, bookkeeping, and others like practice management. With such a system, you can be sure you are benefiting from automation.
As much as you seek a system that should help you comply with the April 1st demand, you need one that will make it easy for you to prepare and file returns. With the Making Tax Digital Software, you should be able to move from shoeboxes of receipts to an expense management process that is real-time and help in invoice management- with the ability to issue invoices, receipts, and reminders. All the tools you have in place should then be able to integrate with the accountant’s data to have a virtually shared environment- this ensures that collaboration and sign-offs are straightforward.
When deciding on a MTD for VAT software, choose a reputable service provider who will ensure that you have an all-inclusive system that is user-friendly.