We’re ready for Making Tax Digital for VAT, are you?
Posted by Chloe Harris
In 2015 HMRC announced that it would be going digital. With a cost of over £3.5 billion revenue lost in VAT returns alone in 2014 to 2015 due to avoidable tax mistakes, HMRC has decided that a Digital Transformation holds the key to an effective, efficient and easy tax system. Promising an end to manual tax returns for millions, a modern tax system that relies on digital submission will make things simpler for businesses.
From April 2019, every business in the UK exceeding the £85,000 VAT threshold will be required to submit their UK VAT returns digitally to HMRC. Making Tax Digital will affect every organisation, from how you run your processes to how your systems are set-up to record and report on tax. For many organizations this characterizes a large paradigm shift with a sense of uncertainty - will their system be compliant and what will this look like?
How does this affect your organization?
By Making Tax Digital, organizations will no longer have to wait a year or more to know how much tax they need to pay. They will be able to see a single view of their liabilities and entitlements in one comprehensive financial picture. HMRC will collect and process information faster to reduce errors and stop repayments owed from building up, making HMRC one of the most digitally advanced tax administrations in the world.
In line with general principles and requirements defined by HMRC, Unit4 Business World will enable UKI customers to comply with new Making Tax Digital regulations. Keeping records digitally and providing updates to HMRC direct from Unit4 Business World will reduce the amount of avoidable errors businesses currently make. Unit4 Business World can provide you with a solution that can derive the VAT return from the digital register transactions in the VAT subledger and transfer the return to HMRC. With this new solution, we are aiming to help our customers secure their compliancy to 'Making Tax Digital for VAT obligations' with numerous benefits to your business, register for our webinar to find out more.
Are your systems up to scratch?
You may be ready for digital tax, but are your systems? If your ERP system isn’t up to scratch to pull intelligent, comprehensive tax reports, you may have trouble getting on board with digital tax. If you want to explore whether your enterprise solution is ready for Making Tax Digital, contact us today to talk to one of our cloud ERP experts.