Knowing your tax requirements in a volatile landscape can be tricky.
With the government’s Making Tax Digital (MTD) initiative delayed until 2026, small and large businesses might still be following outdated tax reporting processes. But despite the challenges of an increasingly digitised corporate sphere, adapting to change will streamline the introduction of innovative accounting technologies.
Whether you’re starting a new business this year or scaling operations up to a global level, implementing an effective and modern tax system is critical. Along with ensuring transparency and compliance, your records will be easier to trace, identify, and keep.
Tax compliance in 2023: The necessary tools, tips, and methods
- Ensure accurate recordkeeping
Making sure that your business stays on top of all tax-related matters is a necessity. If you fall behind or HMRC discover unexplainable gaps in your records, the potential impact on your ability to trade could be significant.
As a responsible business owner, you need to ensure that your recordkeeping is compliant and updated across the board. Regardless of whether or not you create the records yourself, you should understand which tax applies to your business.
Income tax and corporation tax are commonplace for most limited companies, and accurate tax reporting for VAT compliance is imperative for all VAT-registered businesses and their subsidiaries.
- Keep your records separate and updated
To keep your company organised, there should be a separate place for each type of record you’re required to keep. Each document should contain only the correct data and information, and you should try to avoid grouping notes or unrelated administrative documents with tax records.
Maintaining your financial records also involves keeping the information secure and protected, regardless of its format. If you still work with paper copies of receipts and invoices, it’s important to store these securely and make sure only authorised employees can access them.
Similarly, online documents should be password protected and backed up in more than one digital location, just in case your business suffers a cyber-attack. You should also be aware that scammers and fraudsters might pretend to be HMRC, so it’s crucial to stay prudent.
- Streamline your tax reporting
Even though some established companies might prefer to organise their tax physically and internally, it might be easier and more efficient to hire externally. And rather than completing time-consuming internal audits within your own team, an unbiased professional can take on the responsibility.
Outsourcing means that you could delegate the most important tax duties to a business that deals with compliance and tax implications on a daily basis – and thus understands the most complex nuances in the trade.
Not only could this free up more time to focus on essential internal tasks, but it means that your business as a whole will benefit from the expert knowledge working behind the scenes. As for future tax compliance, you’d also benefit from absolute peace of mind.
Overview
When it comes to corporate tax reporting, change is on the horizon. If you haven’t already planned and prepared for the digital tax overhaul, it’s time to put the wheels in motion and ensure that your company can minimise risks and be compliant.
