Tax Digital is a new initiative from HMRC that requires businesses to keep track of their sales, VAT, and other important business expenses digitally. This will simplify the tax return process for businesses by storing all the information in one location. It’s also more secure than paper documents and less prone to human error. The good news is that you don’t have to start this on your own — plenty of software solutions can help make Tax Digital easier for any business. Keep reading to discover why and how to start Making Tax Digital in restaurants and hotels.
What is Making Tax Digital?
Making Tax Digital is a new initiative from HMRC that requires businesses to keep track of their sales, VAT, and other important business expenses digitally. This will simplify the tax return process for businesses by storing all the information in one location. It’s also more secure than paper documents and less prone to human error. The Making Tax Digital initiative will affect different sectors of the economy in different ways. For example, you’ll need to use a system to track your sales and VAT if you’re in the retail or hospitality industry. If you’re in the construction industry, you’ll need to track your subcontractors and materials digitally.
Why is HMRC Making Tax Digital?
The Making Tax Digital initiative puts the government at the forefront of the digital revolution by modernizing the way we manage and track important information. It’s more secure than paper documents and less prone to human error. Providing digital systems for businesses to record their sales and expenses means that HMRC can access this information quickly and efficiently. This will help the government get the best possible value from every pound it spends on administration.
How will Making Tax Digital affect businesses?
Making Tax Digital will simplify the tax return process and make it easier to record expenses and sales. This means businesses will have a more secure way of tracking important information like sales, VAT, and profits. It will be easier for businesses to calculate and pay their taxes at the end of the year. You’ll need to keep your sales and expenses records digitally, not on paper. You can choose from a range of systems, including accounting software. It’s up to you to choose a system that works best for your business and your team.
3 Steps to start Making Tax Digital for your business
– Get ready for Making Tax Digital – You’ll need to keep track of your sales and VAT digitally, not on paper. You should start by checking that your current system is compatible with Making Tax Digital. For example, if you use a paper system, you’ll need to change it to a digital one. – Start planning your digital system – There are different options available, so it’s best to speak to your accountant or other industry experts to find the best system for your business. – Work out what data you need to record – Keep track of the following data digitally: Sales – For example, the cost price, VAT, and gross profit. Other business expenses – For example, utilities, rent, and food costs. – Start Making Tax Digital – Use your new digital system to track your important business data. – Check your progress –
2 Online software for Tax Digital in Restaurants and Hotels
There are many online software solutions for Making Tax Digital in restaurants and hotels. You can choose from software that caters to smaller businesses, to enterprise-level solutions. Here are 2 online software for Making Tax Digital: – Sage – Sage is one of the world’s leading accounting software providers.
Conclusion
Making Tax Digital is a big change for businesses in the hospitality and retail sectors.
