The United Kingdom is looking to push all of its Small and Medium Enterprise (SME) tax return reporting to the digital platform. Nicknamed Tax Digital, organizations will report to the government on a quarterly basis, sending their tax information to be housed in a cloud-based system.
Currently the process is offline and done once a year usually with the help of an internal or external accountant. Now with the new adding of a digital base, there is some worry that all businesses will need to shell out more money for technology experts in addition to accountants and tax return experts. In addition many organizations do not like the idea of their tax information being managed in the cloud rather than a more secure business based server.
The new policy is moving towards an online stay this year with a more mandatory component in 2018. The government is looking to completely do away with paper accounting by 2020.
I for one love the idea, but the transition will be a headache for all involved. Regardless, it is a necessity. When looking to completely change the process of a company (i.e. healthcare, tax return reporting) it will take a few years as well as a mandatory end date for all to meet. This will not be easy, but by 2020, it will be a better process for all. The cloud-based location is a bit of a worry, but again, 3 years should be enough time to work out the kinks. All in all I support the initiative and think it is necessary for the long term benefit of the country.
