Making Tax Digital for VAT comes into force from April 2019 and will bring significant changes to the way businesses are required to record transactions for VAT.
Central to this is the requirement to record and preserve digital records. While many businesses may think they are already doing this, it is now necessary to record the following information for every taxable supply received:
Time of supply (tax point)
Value of the supply
Amount of input tax that you will reclaim
How will Making Tax Digital work?
What this means is that every purchase invoice has to be recorded individually. The VAT Return will also need to be submitted via digital API enabled accounting software.
If you’re one of the thousands of businesses using spreadsheets or recording purchases from statement totals or payments, then now is the time to make that change to digital compliant software, like Xero, and to invoice scanning software such as AutoEntry.
This shouldn’t be seen as a chore but rather an opportunity to streamline your bookkeeping.
What is AutoEntry?
AutoEntry is an OCR (optical character recognition) software that captures and analyses details from scanned or photographed images of paper documents.
Simply download the app to your phone or mobile device, take a photograph of a document and upload it with just a few clicks. Alternatively, documents can be scanned or emailed directly to a dedicated email address. The software then does the rest.
What are the benefits of AutoEntry?
The main benefit this brings is huge time savings as entering invoices manually is time consuming. Once the software has been set up and integrated with your accounting software the level of automation can result in time savings of up to 90%. It brings standardisation and identifies duplication reducing the chance of error.
Another major benefit is document management and the move to paperless working. AutoEntry will retain PDF copies of all documents for the 7 years required by HM Revenue & Customs, even if the subscription is cancelled. This removes the requirement to keep original documents. PDF copies of the documents are also sent to the accounting software, making it easier for business owners and their accountants to find information.
So, whilst changing or implementing new software may seem daunting, the benefits of Making Tax Digital compliance should far outweigh the initial challenges.
For more advice on how you can streamline your bookkeeping for Making Tax Digital compliance, get in touch with Richard.
