Making Tax Digital – Why Accounting Firms need to move in Quickly?

Making Tax Digital

Making Tax Digital is an essential aspect of an ideal accounting system. Going digital has not only made the operations efficient internally but also has brought integration with government systems like Goods and Services Tax (GST). It has improved the base of tax collections and brought up the compliance manifolds. Firms from sole proprietorship to large companies all must follow the digital route to be part of the broader ecosystem in the future, which is changing.

How Making Tax Digital Will Change Your Accounting:

Keeping your attuned to Tax administration:

These investments in technology are greatly helping to improve their capability to gather more tax information. This will help gain more insights into the various tax and financial status of companies as taxpayers. As tax administrations transform, the requirements that will be imposed are altering the shape of digitization for taxpayers, advisers, and everyone involved in the operation of tax systems.

Helps with E-accounting:

Submit accounting or other source data to support filings (e.g., invoices,trial balances) in a defined electronic format to set a timetable along with frequent additions and changes at this level.

E-audit:

The accounting data can be analysed by government entities and cross-checked.  It will assist filings in real-time to map the geographic, economic ecosystem; taxpayers receiving electronic audit assessments with limited time to respond. This is the road map laid down by tax and government authorities in developed countries, thus making it essential to go for digitization.

New Technologies will Force Accounting and Taxation to be Digitized:

Businesses are adopting digital technologies to augment their operational models as these emerging technologies bring in cost efficiencies.  This will make companies move from a CapEx to an OpEx model, for example, delivery services on cloud and offering pay-per-use model. The concept of a sharing economy offers on-demand access to goods and services and brings in efficient utilization of unused inventory of assets across industries. As taking in wider acceptance of newer technologies gains pace, enterprises realize a need to identify the business functions that may derive the most significant value. Tax functions will need a deep understanding of such technologies and digital businesses in their current processes.

The requirements of internal stakeholders and expectations from the tax function are changing, as companies are now running 24×7. The expectation from the tax function to contribute and partner with the business is the highest ever.

There are new laws that deal with inherent difficulties in determining the jurisdiction in which value creation occurs. This is because the value in a digital taxation can (and typically is) delivered from multiple locations.

JDK Accounting has an expertise of latest technology integration and you can use a contact for timely and accurate Digital accounting and taxation Preparation services. Whether with individual or company taxation – we have a solution for most problems.

If you need help, in making your Tax Digital, kindly contact us today.

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