The UK government’s torch of hope to put an absolute end to tax return officially took the title as the “UK’s New Tax System” this April 1st of 2019. Though some taxpayers are still hesitant to fully accept the new system, the UK government together with the HMRC foresee that Making Tax Digital will effectively conform to its goals.
The goals are to make the tax administration more effective, more efficient, and simpler for taxpayers. Also, the HMRC expects that the MTD for VAT will eventually put the current tax administration in one of the most advanced tax administrations not only in the United Kingdom, or the whole continent of Europe but in the whole world.
Now, there’s one thing that plays a substantial role in the implementation of MTD for VAT, the MTD bridging software. What is the significance of MTD bridging software not only in the new tax system but to the whole taxation community? Read the next pages to figure out further details about the so-called and beneficial MTD bridging software.
Bridging software: The Significant Role it holds in the World of MTD
It is said that HM Revenue and Customs is carefully and dedicatedly working with several accounting software developers and/or providers. This is assumed to make the operation of the UK’s new tax system, the MTD for VAT, to come in great success.
The following MTD bridging software must be compliant enough in MTD way. However, it’s cleared by the HMRC that the MTD bridging software won’t be able to cover every requirement of the MTD for VAT – digital record keeping and maintaining digital links between data are some of these.
In addition to that, taxpayers are the firsthand beneficiaries of the MTD bridging software. It’s for the reason that without the said software, the compliance in tax digitisation will be a big burden for them.
Who are the Legitimate “Taxpayers”?
Taxpayers aren’t specifically referring to a group of persons or people who comply with their tax duties. In the context of Making Tax Digital for VAT, taxpayers are the businesses, sole traders, landlords, limited and umbrella companies, and partnerships who fall under the current VAT threshold of £85,000.
For HMRC, taxpayers are their customers. Since that MTD for VAT is now officially operating in the UK, taxpayers are now mandated to fulfil their tax obligations digitally which will be made easier, faster, and possible with the use of MTD bridging software.
Benefit #1: Promotes Accuracy in Recording and Filing Process
With the use of bridging software in order to comply with tax obligations digitally, certain errors and/or miscalculations will now be easily detected and avoided.
This is because the MTD for VAT with the immense assistance of MTD bridging software promotes better accuracy measures in recording and filing process.
With that, taxpayers will no longer need to check tax histories or look for old receipts to track down the possibly committed errors.
Benefit #2: Effectively Boosts the Employees’ Productivity
It may not be well-recognised but not only the MTD for VAT but as well as the MTD bridging software is best in enhancing the workforce’s productivity. The MTD bridging software makes the recording and filing process easier, faster, more accurate, and less risky for both the agents and their clients [taxpayers].
Benefit #3: Makes the Compliance Easier and Better
The compliance to the MTD for VAT will now be easier and better for taxpayers with the use of MTD bridging software. With the MTD-compliant bridging software, the time that should be allocated for record and/or filing process of tax information will be shortened.
Benefit #4: Offers a Good Habit of Technology Use
Nowadays, technology can be used generally by almost all ages. However, that can somehow be considered as its very downside since that supposed limitations aren’t being followed respectively.
But, in the context of MTD, it more likely offers a different way of using technology – a good habit of technology use. To say the least, the UK government came up with a compelling initiative not only for their own benefit but also to promote better use of technology.
Benefit #5: Stands as a Great Movement for Innovation in the UK’s Taxation
Except for the fact that the UK government and HMRC finally dethroned the long-running tax return in the tax administration, the new and digitised tax system now stands as a call for innovation. The MTD bridging software itself proves that beneficial innovation is possible not only in the business and taxation industry but in general,
The implementation and the whole context of the UK’s Making Tax Digital can be considered complex in every way. However, with the great work and dedication of the UK government and HMRC, together with the help of MTD bridging software, the MTD for VAT is expected to surpass the long rough road ahead of its journey.
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.