Making Tax Digital

Making Tax Digital (MTD) is an HMRC initiative that will revolutionise the UK tax system and ultimately bring an end to self-assessment.

The primary aim of Making Tax Digital is to make tax administration more effective, efficient, and easier for taxpayers through the implementation of a fully digitalised tax system by 2020, whilst also reducing submission errors along with HMRC’s overheads for managing tax affairs.

The first major change is that ANY VAT Return after the 1st April 2019 will need to be submitted electronically. This does not mean simply inputting into the current HMRC portal but will involve uploading digitally into a new portal using an API. There are very strict rules for this and they prohibit the option to change the data manually i.e. all data collation and reporting MUST be done digitally.

Businesses and organisations will be required to use a functionally compatible software product to submit their returns to HMRC. The software will use HMRC’s API (Application Program Interface) platform to submit information to HMRC. The current HMRC online tax return services will be withdrawn for those within the scope of the MTD rules.

Following the implementation of MTD for VAT, MTD for income tax (for the self-employed and those with income from property) and MTD for corporation tax are expected to follow, so this ‘digital transformation’ will be part of the tax submission fabric going forward and everybody should be prepared. IMS can help.

IMS is a registered developer, recognised and sanctioned by HMRC, so this along with our expertise in System 21 finance applications, makes us the natural partner for the new world of Digital Tax Transmission.

Data Cleaning Audit

Making Tax Digital was introduced by HMRC with an objective of improving tax accuracy. We are presently only in the first stage of MTD introduction, and at IMS we predict poor  system data accuracy is going to be one of the biggest issues as MTD moves to the next stage.

The discrepancies in your tax records that this year are picked up in the Excel bridging between your iSeries and the MTD HMRC submission. This is permitted only for 2019-20 tax submissions; longer term MTD regulations preclude the use of Excel. This means that all adjustments in system data are going to have to be done live prior to producing your MTD report.  Discrepancies will have to be handled by data corrections in the live system and businesses will not be able to do ’last minute’ adjustments.  Are you prepared? Does your system not only produce the nine boxes of data required by HMRC but also contain accurate data?

Businesses are going to need to put the data in correctly in the first place. This means users must be properly trained in how to use the system correctly. Clean data saves time by avoiding retrospective corrections and ensures you are not paying excessive tax bills.  Contact IMS today for a 1 day consultancy to investigate how you can improve your data accuracy and avoid paying excessive tax bills.  Many companies have already benefited enormously from this audit, so why not book it today?

IBMi Making Tax Digital Bridging Application

Accepted and ratified by HMRC March 2019. Check the HMRC Site Here.

The IMS MTD solution automates the submission of VAT returns (with ongoing development for other tax submissions) from System 21. The customer has a chance to review the figures before final submission. The system has been developed by IMS, is hosted and managed by IMS as part of our support program that we have excelled in, in over 25 years of business growth. The solution is based on using data from the System 21 VAT module.

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