Three Simple Steps to Digital Tax Readiness
This is the second blog in our digital tax series. In the first, we asked, will you be ready when tax goes digital? Here, we take a closer look at how small businesses can prepare.
Around the world, government services are going digital to increase efficiency, save costs and improve accuracy. In the UK, the plan is to automate as much as possible the collection and processing of information used to calculate tax. Businesses will update details and keep track of their tax affairs online.
With the recently announced general election affecting the digital tax timetable, UK small businesses can take this opportunity to get to grips with the implications of digital tax, and prepare for when it comes by following our three simple steps:
1. Audit Business Processes
It’s a good idea to look at how you currently manage your finances to understand how this will be impacted by digital tax. Multiple, disconnected and manual processes and systems may already be inefficient for your business; they won’t help make the switch to digital tax.
2. Make Small Incremental Changes
Approach the digital switchover in stages; elements of the new approach have been introduced already so you can choose how to manage your move. If you do your accounting by hand, a good starting point is to bring in a digital accounting solution.
3. Research and Adopt Digital Tools
Accounting tools that can integrate with digital tax accounts will make it much easier for your business to see the benefits of online tax management. Research and adopt those that will help you make the change.
Any form of change takes a period of adjustment but there are many advantages to going digital with tax. Connecting the digital financial systems of businesses to government services makes for smoother end-to-end processes with a higher level of automation. Companies stand to gain visibility into their real-time tax situation online and save many manual hours pulling tax information together.
Building digital skills and adopting the right tools now will help smooth the transition to digital tax and see your business gain these advantages sooner.
Look out for the final blog in the series when we’ll consider in more depth the benefits to small businesses of going digital with tax.