Don’t miss the deadline: All you need to know about Making Tax Digital
With the New Year now well underway, the deadline for the government’s Making Tax Digital (MTD) scheme on 1st April 2019 is drawing ever closer. Despite taking effect on April Fool’s day, the scheme is certainly no joke, and businesses who are unable to comply with the new regulations could be in-line to receive a significant fine.
Time is running out, so it’s important that you’re not only aware of MTD itself, but also conscious of the compliance of your existing software, how it might impact you and the options available to you.
What is Making Tax Digital?
A compulsory government initiative, Making Tax Digital is designed to simplify and modernise tax administration. From 1st April this year, businesses boasting a turnover above the VAT threshold will be expected to not only keep digital records, but also submit their VAT returns digitally. Even if your turnover drops below the threshold after this date, you will still be expected to comply with the regulations. Those operating below the threshold will not be required to comply but can choose to upgrade their software voluntarily.
Making Tax Digital is currently only being introduced for the submission of VAT returns, but additional aspects such as corporation tax and income tax are due to follow suit at a later date.
These regulations are intended to move the taxation process into the digital age, creating an easy-to-use, effective facility that cuts down administration time and reduces the likelihood of issues as a result of human error.
As MTD takes effect, an Application Programming Interface (API) will be required to create a bridge between HMRC and your business’ accounting software. Without the correct API, your software will not be compliant.
The role of Prism2 in achieving compliance
An important step in the process of compliance is ensuring your Prism2 back office software is properly linked with your accounting software and able to exchange financial data regarding sales, inventory and so on. Unfortunately, for the majority of Prism2 users that simply isn’t the case and with fines the punishment for non-compliance with MTD, making sure that data is being properly shared for your digital records is critical.
The good news is that after an extensive period of development, TLM is implementing a link to Sage 25, otherwise known as Sage 50cloud, to comply with MTD. This system module will be available for all Prism2 users with TLM support contracts. Those utilising the Prism2 back office system will be required to pay a £250 fee. This link will not be compatible with Sage versions 24 and 24.2 however.
TLM is the only supplier able to offer this module for Prism2 customers.
Unfortunately for those using Prism Classic, this module will not be available and will require a change in back office system to achieve a compliant exchange of data.
Having completed a period of testing with the help of a skilled retail accountant, a piloting stage is already underway.
How can I find out more?
Please contact firstname.lastname@example.org to discuss changes to your Oracle Prism2 system or to explore any additional options available to you.
If you have further questions regarding MTD and the implications for your business, we would advise you to contact your accountant.
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