In 2015 HMRC announced that they 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 have decided that a Digital Transformation holds the key to an effective, efficient and easy tax system. Promising an end of manual tax returns for millions, a modern tax system based on digital submission will make things simpler for businesses.
But what if your ERP system isn’t up to the task? The new system will be mandatory from April 2019, meaning the 2.55 million VAT registered businesses with a turnover exceeding the £85,000 VAT threshold need to make a change to compliant software.
How does this affect your business?
Just like modern online banking, users will be able to see a single picture of their liabilities and entitlements in one comprehensive financial picture. By Making Tax Digital, organisations will no longer have to wait a year or more to know how much tax they need to pay. 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.
Are you ready?
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 ERP system is ready for Making Tax Digital, chat with one of our ERP experts today.