March 05,2019

UK’s new Making Tax Digital project is going to take effect from April 6th, the first day of the new tax year. This project plans to digitalize the tax documents with small and medium-sized business.  

This project requires small and medium-sized business to register for value added tax (VAT) and to submit their VAT returns through HM Revenue & Customs specific software. From the standpoint of HM Revenue & Customs, the purpose to propose this electronic system is to reduce the cost and improve the accuracy of any taxation issues. From the standpoint of business, retailers should be happy with the new technology to have a more accurate overview of taxation record. 

However, this new digital system caused some concerns before initiation. The Association of Convenience Stores (ACS) commented about this new system and requested the government to postpone the initiation of this project. An independent group of cross-party politicians, House of Lords economic affairs committee, mentioned that the lack of publicity is one of the major disadvantages to launch this project. James Lowman, the chief executive of ACS, mentioned that small business owners were not aware of this new system and HMRC should consider delaying the implementation of Making Tax Digital project.