Change is fast approaching across the Legal sector. Taking effect from 1st April 2019, Making Tax Digital (MTD) is the government’s latest initiative which looks set to change the way accounts are managed in today’s digital world.
The regulations will be firstly introduced for VAT processes, requiring all VAT-registered businesses with a taxable turnover above the threshold to use the MTD service to keep records digitally and utilise software to submit their VAT returns. Yet, while these efforts aim to make it easier for businesses to submit their tax correctly and keep on top of their affairs in the long term, the regulations will require many to overhaul their previous VAT processes and opt for more digital procedures, to ensure full compliance.
Now, for many Law Firms time is running out to take the necessary steps for MTD and it is now crucial that they check the status of their systems to ensure their current software has the controls in place to maintain an efficient and compliant operation. As the new regulations draw ever closer, Firms that don’t ask questions of their existing software provider could be leaving themselves open to risks of falling short of the regulations or incurring higher fees.
For example, the impact on a Law Firm could be that their existing supplier requests that they change to an alternative replacement system, which could come at a large expense to the business. Should they chose not to, remaining with their existing system could mean that they simply will not be compliant from the moment MTD it comes into force.
In addition, many Law Firms may not have considered the potential time it takes to implement and migrate to a new software solution. Data migration takes considerable time and resources to make sure it’s done right, which could leave many Firms caught out should this process be left too close to the deadline. This could have a number of consequences – such as forcing them to accept a high renewal or large migration fee to remain with the current supplier, or even sign a lengthy agreement on a software that they are not fully satisfied with.
With the chance of increased costs looming, Law Firms must now check their supplier’s MTD status and make fast decisions over their software soon if they are to adhere to new industry regulations and remain cost effective. Taking these steps now could help Firms to reap the full benefits of software suppliers which provide fast migration with full support and expertise, meeting the demands of the MTD initiative and preparing them for other industry regulations on the horizon.
Here at Insight Legal, we have been working with the HMRC to ensure that our Software will be compliant in plenty of time for the April 1st deadline.
To find out more, get in touch with our friendly staff on 01252 518939 or email email@example.com