The newly implemented tax system, and is said to be the UK government initiative to completely dethrone the tax return is named Making Tax Digital. And just this April 1st of 2019, the Making Tax Digital came to take the throne from the long-running tax return. 

Though both the UK government and the HM Revenue and Customs express their big hope that Making Tax Digital brings a lot of convenience to the UK’s tax society, it still has its downsides. Since the public are used to submitting their tax obligations through the traditional system, the emergence of misconceptions and rejections is unavoidable as well.  

Since the Making Tax Digital for VAT is a notable innovation, the people can’t stop weighing in whether it’s an asset or a liability to the UK’s tax society. With that, it has been the topic of numerous articles, discussions, and/or reports not only in the United Kingdom but all over the world. 

Thus, to contribute meaningful details regarding the recently launched tax system, Making Tax Digital, this article talks about the believed advantages as well as the foreseen disadvantages of the mentioned system. The following pages unfold the answers to some of the confusions of the people regarding the Making Tax Digital for VAT. 

Cons

• MTD for VAT requires quarterly submission of tax records

Now that MTD for VAT is officially operating as the UK’s new tax system, VAT-registered businesses having a revenue above £85,000 need to meet their tax duties on an online basis. Also, the MTD for VAT mandates businesses or taxpayers to submit their tax reports on a quarterly manner – four times the deadline compared to the previous tax system. 

Thus, the regulation of the quarterly meeting of tax obligations is one of the few to be considered as a downside of the MTD for VAT. This change in the matter of submission may cause pressure to the businesses. 

• Digital exclusion is highly visible 

The digital exclusivity of some people or taxpayers is expected to be one of the major issues in the implementation of Making Tax Digital. The use of gadgets or any technology-related equipment may be forbidden to some people due to religion, disability, beliefs, and so on and so forth. 

Pros

• MTD for VAT is more effective, more efficient, and simpler

According to the HM Revenue and Customs, it’s the MTD for VAT’s purposes to make the tax system more effective, more efficient, and simpler for taxpayers. The UK government and the HMRC have always been formulating a better tax system and services to offer to their customers (taxpayers/clients). 

It may seem impossible to come true, but with the help of technology, the MTD for VAT will be able to meet its objectives in no time. Moreover, the HMRC won’t let the MTD for VAT fail, that’s why it’s always working on better “add-ons” to the new system. 

• It’s a wake-up call to a mindful innovation

The continuous innovation of technology or gadgets in the present time is definitely unstoppable. Moreover, anyone and almost all ages can now have access to it – which is somehow disturbing in various aspects. 

With the implementation of the MTD for VAT, the UK sets a benchmark and a wake-up call to a mindful innovation and use of technology. The UK government and the HMRC prove that there can be a more meaningful reason for upgrading and use of technology.

• It makes tax-related works hassle-free and less stressful

The people who work under tax-related jobs or professions are well aware of how stressful it is to work on tons of papers and loads of tasks only to comply with the tax obligations. One thing to be grateful for the arrival of the MTD for VAT is that it delivers a hassle-free and less stressful work environment. 

The MTD for VAT contributes to slowly eradicate the mountain-like piles of papers on the tables of the workforce. Moreover, since the system completely requires the affected VAT-registered businesses to meet their tax duties online, it will definitely be less stressful and hassle-free for the employees working on the tax-related assignments.

Final words: 

The stated key points are merely a few and considered to be the major advantages and disadvantages of Making Tax Digital. All throughout the regime of the MTD for VAT, it’s expected that more misconceptions will show up.

However, the UK government and the HMRC strongly believe that the new system has more advantages which may be invisible to the public for now. But time will come that certain misconceptions will be replaced with a positive response from society. 

AUTHOR BIO:

Kath Ramirez embraced the dream of being a writer since she was in 4th grade. She took it seriously and she now writes for My Digital Bridge, a smart, cloud-based accounting software provider in England and Wales. Aside from writing, Kath also keeps herself busy spending time with her family, cherishing the role of a mom to 3 dogs and a puppy, reading random books, and diving into the world of photography. She’s not even a pro to whatever she’s engaged into right now, but one thing she knows, she’s happy and that’s more than enough.