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The countdown is on for Making Tax Digital. The new requirement, which obliges businesses to keep financial records digitally and report to HMRC using approved software, launches on 1 April 2019. This date applies to the majority of VAT-registered businesses, with other companies joining the scheme in a staged roll-out.

Making Tax Digital has been on the cards for a while. However, awareness amongst business owners still seems to be low. A survey of 500 companies, carried out in July 2018 by the Institute of Chartered Accountants of England and Wales (ICAEW), found that around 50% of respondents hadn’t heard of Making Tax Digital for VAT – despite the looming deadline.

Why you need to be prepared

As you’d expect with HMRC, a penalty system has been developed for late submissions. This means that VAT-registered businesses need to be 100% ready to start using the new system by 1 April 2019 to avoid racking up penalty points.

Unfortunately, getting ‘Making Tax Digital Ready’ won’t be as simple as it sounds for some businesses. That’s because, as we reported in a recent article, you may need to upgrade your IT infrastructure so you can install and run compliant accounting software that works with the new system.

This is particularly urgent if you run Sage Accounts, as Version 25 (the only one that’s compliant with Making Tax Digital), won’t run on certain hardware and operating systems. These include Small Business Server, Windows Server Essentials and all operating systems pre-dating Windows 7.

You could still be in trouble even if you’re using a supported server or operating system, such as Windows 10 or Windows Server Standard 2012 onwards. Version 25 also requires Office 2010 (32-bit version) or later, or Office 365, to operate, plus a multitude of other requirements around processor and network speed, memory and storage space, screen resolution, and so on. You can read about these requirements here.

Whilst older versions of Windows servers, operating systems and software are already at or approaching ‘end of life’, many businesses are still using them. However, if you’re VAT registered and want to keep using Sage Accounts, you’ll need to act quickly to get your systems up to scratch before 1 April 2019.

The good news is that you won’t necessarily have to spend a fortune on new hardware. Depending on your existing infrastructure, and your current and future business requirements, there are different options we can explore to make sure Sage Accounts Version 25 runs smoothly on your systems by the April deadline.

What to do next

First, you need to ascertain whether your current IT set-up will support Version 25 of Sage Accounts. If it does, that’s great – just log in to your online Sage account, download it and you’re ready to go (JBS or your accountant can help if you’re not sure what to do).

On the other hand, if your infrastructure looks like it needs upgrading, or you’re just not sure, Jalapeno Business Services can help. Our expert engineers can assess your existing set-up and discuss the best way to host and manage your accounting software going forward. It all starts with a 20 to 30 minute chat, with no obligation to act on our recommendations, so why not get in touch today?

Or, for a more in-depth look at your network, we offer a FREE systems audit that flags up any issues with your infrastructure and sets out how this could be improved in the short, medium or long term. Click here to book an audit, call us on 01636 681 110 or email enquiries@jalapeno.is.

More about Making Tax Digital

For more information about Making Tax Digital and how it will affect your business, we recommend you speak to your accountant. You’ll also find a wealth of information online, with useful sources including the HMRC and Federation of Small Businesses (FSB) websites.