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VAT Digital Tax

02/08/2017 06:48:53
I will come within digital tax for VAT as a VAT payer from 2019. I keep meticulous records daily on paper which take seconds to record.. 4 times a year I submit a VAT return on-line.

1. Will HMRC b e offering free of charge software for record keeping for those of us joining digital VAT in April 2019?

2. Can we see some examples on-line of the exact process and time it takes both to be trained in it and also just to see how it works eg you make a train journey for work. Currently I come home and that night record the amount and keep the receipt on my paper file. It takes about a few seconds only With digital tax would I have to go on line to record the amount and learn complex new software? I hate excel by the way and do not use that product currently as it is very time consuming.

3. Will the software require us to be on line every time we note an expense down in the records?

4. If it is hacked will HMRC indemnify us against the loss suffered from being forced into this kind of on line digital record keeping we do not want?

5. If we will have to buy it how much will it cost, who will we buy it from and will the cost be 100% tax deductible that year?

Thank you.
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Re:VAT Digital Tax

02/08/2017 11:40:37
Hi
Thank you for your enquiry. Please bear with us as I have referred this to the making tax digital team. I will come back to you as soon as I hear from them.
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Re:VAT Digital Tax

09/08/2017 13:34:02
1. Will HMRC be offering free of charge software for record keeping for those of us joining digital VAT in April 2019?
We will not be offering our own software products, but we have been working very closely with the software industry to support them in developing a wide range of products at different price points that will help businesses meet their MTDfB obligations.

2. Can we see some examples on-line of the exact process and time it takes both to be trained in it and also just to see how it works eg you make a train journey for work. Currently I come home and that night record the amount and keep the receipt on my paper file. It takes about a few seconds only. With digital tax would I have to go on line to record the amount and learn complex new software? I hate excel by the way and do not use that product currently as it is very time consuming.
The exact process businesses will follow, the process for making the updates and the time taken to familiarise with the new processes will vary depending on both the complexity of the business transactions and the functionality of the software package chosen. Whatever software package is used, the basic processes for updating HMRC will be light touch, with the software doing much of the work. This will also enable businesses to keep track of their financial and tax position much closer to real time.

3. Will the software require us to be on line every time we note an expense down in the records?
This will be dependent on the software product chosen and its functionality. Recording transactions digitally does not mean that records must be stored online or with cloud-based storage. You will, of course, need to go online to complete the quarterly updates, however the amount of data to be transmitted to HMRC will be very small.

4. If it is hacked will HMRC indemnify us against the loss suffered from being forced into this kind of on line digital record keeping we do not want?
The security of customer data is a top priority for HMRC and the Department has a dedicated cyber command centre to assess and manage cybersecurity risks. Our recently published Terms of Collaboration between HMRC and software developers includes requirements for protecting client data in line with the Data Protection Act 1998, the Privacy and Electronic Communications (EC Directive) Regulations 2003 and Equality Act 2010, and from May 2018, the General Data Protection Regulation. It sets out specifications for software products in terms of cyber-security, the security, storage, management and processing of customer data.
We work closely with partners including the National Cyber Security Centre (NCSC), other Government departments and industry to tackle this. Our Cyber Security Team undertake a broad range of work to prevent abuse, protect customers and pursue the criminals undertaking these attacks.
There is no requirement to maintain records online and HMRC does not propose to indemnify its customers against loss. Where HMRC has customer data protection or cyber security concerns, it will act immediately to take all necessary and appropriate action to protect HMRC systems and customer data.
5. If we will have to buy it how much will it cost, who will we buy it from and will the cost be 100% tax deductible that year?
Industry has accepted the need to ensure the availability of a wide range of products at different price points.
Through our engagement with the software industry, we know that MTDfB will transform the digital market, bringing increased opportunities for current and future software developers to offer a range of services, software options and functionality to businesses. This will lead to a highly competitive market, which will ensure the costs of purchasable products are kept low.
Links to approved software providers will be made available through Gov.uk.
As with other business expenditure, support for complying with MTDfB requirements will be provided via various tax reliefs through 100% deductions against tax for purchase of hardware, software and other revenue expenditure.