The Lloyds Bank 2020 Transformation with Tech report provides key statistics that show how technology helps micro businesses adapt and survive.

Making Tax Digital for VAT becomes mandatory for all VAT registered businesses from April 2022, giving small businesses a chance to use digitalisation to further streamline processes and save on costs.

The impact of technology in numbers

  • 48% say they would’ve ceased trading due to the pandemic without adopting digital technology
  • 27% ventured online for the first time, with 47% finding ways to simplify their business using technology
  • 35% report cost savings associated with digitalisation

Making Tax Digital and microbusinesses

HMRC has stated that the Making Tax Digital initiative aims to provide benefits to VAT-registered businesses through going digital.

By keeping digital records, businesses can see their finances in real-time. It also means that administration is spread out over the entire quarter ahead of the return and prevents the last-minute scramble to calculate the figures for the VAT return.

The VAT return process is also improved, with data being transferred between digital records and the return without intervention that can be prone to human error. That means accurate returns to HMRC and no nasty surprises down the line due to transcription errors.

Your next steps

Our experience of the initial phases of MTD for VAT has proven that the most benefits are felt by those who have prepared ahead of time to join the initiative.

There’s no need to find the funds for a whole new bookkeeping system, as bridging software allows you to keep your digital records in an Excel spreadsheet and use the add-in provided to digitally transfer your figures to the return.

The MTDfVAT software is designed to be functional and affordable for small businesses with a single VAT number, allowing you to complete a year of MTD for VAT returns for £50 + VAT. It comes with our spreadsheet template to help you get started with Making Tax Digital.

Check our Getting to grips with MTD for VAT for Small Business blog to find out more about the initiative.

When you’re ready to purchase, visit our easy checkout page to sign up.