The United Kingdom is merely one of the prime places that house a huge number of big businesses and potential start-ups in the whole world. To comply more effectively, more efficiently, and easier with the collections of taxes, the UK Government’s non-ministerial department known as Her Majesty’s Revenue and Customs or HMRC, launched its newest and digitised tax system.
Evidently, the HMRC found a good way to use the technology and to truly benefit from it. For those who aren’t aware of the taxation journey that the UK has en route, you better know now from this article. It shows how HMRC made another notable action in the history of the UK’s tax system.
Stepping out of the traditional tax system
The traditional or the manual tax system has been in practice for a good number of years. That’s why the implementation of the Making Tax Digital in the United Kingdom is one step forward to a more progressive and digitised tax system in the world of business.
The UK is evidently making an effort to breakthrough from the community’s fabric and started its own – well, a better one of course.
The Making Tax Digital: As HMRC’s Initiative
The Making Tax Digital is said to be the HMRC’s initiative that sets a possible vision for the “end of tax return” and a “transformed tax system” by the year 2020. The MTD’s primary goal is to deliver more effective, more efficient, and easier tax system to taxpayers.
The defined changes apply to a wide range of taxpayers. These taxpayers include most businesses, micro-businesses, landlords, self-employed people, and as well as the individual taxpayers.
The Making Tax Digital: A Benchmark-setter
The UK’s MTD can also be considered as a benchmark-setter in the field of taxation not only in Europe but as well as to the global business and tax system. It’s not only being looked up to for its aim to make the UK tax system a more effective, more efficient, and easier one – there’s more to that.
The MTD is also a benchmark-setter in a way that it’s an existing proof that tax system can also dive into the corporate world along with technology – innovated and much better. It could be a wake-up call to also put a minimal elevation in the tax system and lighten the loads of both parties which are the taxpayers, the accountants, bookkeepers, and so on.
HMRC and the Accounting Software Developers
To make it easier for the taxpayers to switch to digital tax, the HMRC is consistently working carefully with accounting software developers. Since the changes done in the UK’s tax system is applied in the wide range of taxpayers, the HMRC make sure that the bridging software is qualified enough to be MTD compliant.
These are some of the considerations to be MTD-compliant software:
- HMRC works with external vendors who will possibly link into their systems. These external vendors are software developers.
- Bridging software or software developers must be able to handle all business structures.
- HMRC seeks a software developer that can cope with the changes done from time to time.
- Bridging software must have client-friendly tools to make it easier to be manipulated.
- HMRC still consents the use of spreadsheet submissions but you still need software to file them. It means that you need a solution that offers bridging software, where you will be able to import any spreadsheet into an MTD-compliant environment.
The UK’s Tax System and the Technology
The UK’s HMRC might be at the beginning of its new journey, but it’s undeniable that the UK tax system is now more progressive and successfully created a bond between two different worlds – the tax system and the technology.
Also, the HMRC breaks the barrier that stops the tax system to improve and elevate for some reasons. Now, the HMRC’s initiative, the MTD, will extremely make its name in the tax system history.
Though technology and tax system lies in two different worlds, with only one ambition, it met in the middle of the business world. Now, the UK’s tax system is above most of the other tax administrations and will continue its new journey up until the complete success of MTD.