Making Tax Digital (MTD) is an attempt by HMRC to digitalise the British tax system. Businesses will have to use commercial software for record keeping purposes and to update HMRC every three months, beginning with Value Added Tax and from there, moving to Corporation Tax Returns. Read on to see how Sage 200 – Making Tax Digital works for your business.

Why this, why now?

It is estimated that HMRC loses about £9bn every year because of taxation errors. They are confident that automated VAT submissions and digital record-keeping will make the process error-free and easier.

How will it work?

You will have to digitally capture every transaction during a specific VAT period and at the end of that period, send HMRC an automated 9-box VAT return, directly from the whichever software you are using. This more efficient and simpler process will cause fewer disruptions to your business in the long run.

The revised regulations will come into effect on 1 April 2019. All businesses with a taxable turnover higher than the threshold for VAT registration (£85,000) must comply.

Software Requirements for Sage 200 Making Tax Digital

According to the latest MTD VAT draft notice issues by HMRC, the full set of digital records to meet the new requirements does not necessarily have to be in the same programme, or even be held in the same place, but there must be a digital link between the programmes used.

The software used must:

• Keep all records in digital format
• Be able to create a VAT return using this digital data
• Provide HMRC with VAT data when requested
• Accept information via its API from HMRC, allowing the latter to send reminders

How Sage can help your business to prepare for MTD – Sage 200 Making Tax Digital

Sage has been working side-by-side with HMRC to prepare for the launch of Making Tax Digital. If you already submit VAT returns via Sage software, complying with the new regulations might be as simple as installing the most recent update.

The good news is that Sage 200cloud is MTD ready and so, able to facilitate the submission of VAT returns via the software even before the new regulations take effect.

Sage understands that many of its clients are still working on older versions of the software and that they might not be ready to upgrade to the new version. Keeping this in mind, the developers of Sage have created a new MTD submissions module to make it possible for users of older Sage versions to become fully compliant with the new HMRC system.

There is only one prerequisite: to be compliant you have to install the correct module on your present Sage 200cloud software before the new HMRC requirements become effective, on 1 April 2019.

If you do not currently process your VAT returns via Sage software, contact one of our business software consultants, who will explain how GCC can help.

Further Information

If you have any questions about this or need assistance, then please contact the GCC Group Support Team on 0345 260 1151 or servicedesk@gccgroup.co.uk

Sage 200

Sage 200 combines powerful accounting software with the freedom of the cloud. Connect the dots between departments and become a smarter, more agile, and better-informed business.

The modules available within Sage 200 mean the software can grow and adapt as your business grows.

Sage 200 offers:

• Supercharged features to power growth

• Greater control & insight of your business

• A simple, intuitive, user interface to support users

• Integration with Microsoft 365 – allowing your teams to collaborate and share more easily

• Module options for managing stock, projects & manufacturing processes

This intuitive software delivers big picture visionary information, as well as granular details.

Sage 200 has the capabilities to deliver the insights you need to achieve success for your business.