Making Tax Digital – is it an opportunity or a threat?

Making Tax Digital (MTD) is a government initiative that sets out a vision for ‘a transformed tax system and the end of the tax return by 2020.

The initiative is part of a wider government vision to enable all taxpayers to pay their taxes and manage their tax information online.

The smallest businesses will be exempt from MTD – the original proposal was for “smallest” to be “turnover of £10,000″ but following the consultation responses, this figure may change.

The current plans:

1. Taxpayers will send in summaries of their income and expenditure at least four times a year.
2. More taxpayers will be able to use the cash basis of accounting.

For most of the accountants, clients generally send in their records 2 weeks before VAT Return filing (VAT Clients) or 3 to 4 months after the year-end (VAT Exempt Client).

Most of the accountants do a limited review while filing VAT return. Making Tax Digital makes it mandatory for the businesses to file returns on a quarterly basis with underlying assumptions that statements filed are accurate and do not throw any big surprise at the year-end.

MTD challenges:

Making Tax Digital throws the following challenges to the accounting firms:

• Handling huge influx of the volumes at every quarter
• Setting up meeting with clients to go through their statement of affairs and discuss potential liabilities, etc
• Tax planning should be done every quarter rather than every year
• Moving from spreadsheet accounting to more formal accounting
• Adequately trained staff regarding bookkeeping as well as compliance on Making Tax Digital

MTD opportunities:

While Making Tax Digital offers several challenges, there are several opportunities for accounting firms to grow. Accounting firms can embrace the following:

• Move from spreadsheet/ Desktop Accounting to Online Accounting
• Ride on automation software
• Guide clients to do their own bookkeeping or provide bookkeeping service
• Manage Internal System to ensure they have adequate time to spend with clients to discuss tax liabilities
• Take help of external service providers for doing bookkeeping, reconciliations and management reporting

Corient helps Accounting Practices to manage their back office by providing Book Keeping, Payroll, Year End on a real time basis on various software including Xero, SageOne, Quickbooks, Freeagent, Kashflow, Xero Workpapers, IRIS, Digita. Our services help accountants to take on additional work and significantly increase revenue without hiring and training the team, at extremely low costs

If you need any free consultation on how you can increase revenue by adding service lines, please feel free to get in touch with us at info@corientbs.com

Visit us at : http://www.corientbs.co.uk

Do you know your Break Even Point?

No matter how great your business model is, you can’t survive if you can’t manage your company’s cash flow. Calculating your break-even point will ensure that your business is profitable based on your costs and your sales.

Many businesses fail due to poor cash-flow management.

One of the most shocking facts revealed during the survey was that most of the businessmen fail to analyse the cost sheets correctly and put wrong Gross Mark-Ups at the time of pricing their products.

Most of the businesses are carried away by gross margin and forget to analyse fixed overheads and put them on the back burner.

The best way to analyse if you are making a profit is to keep track of break-even sales.

The higher the gross margins, lesser the break-even point or lesser the fixed overheads lesser the break-even point.

Keep a tab on your break-even point, keep making sales exceeding your break-even point and the higher you go away from break-even point, the more cash you generate from your business.

Happy Accounting!

Corient helps Business to manage their accounting function by providing Book Keeping, Payroll and Other Services on a real time basis on various software including Xero, Sage One, Quickbooks, Freeagent, Kashflow, Xero Workpapers,. Our accounting services help businesses to take right decision and grow by business based on accurate and timely financial data

If you need any free consultation on how you can increase revenue by adding service lines, please feel free to get in touch with us at info@corientbs.com

Visit us at : http://www.corientbs.co.uk