Making Tax Digital and minimising cybercrime
Making Tax Digital is a crucial part of the government’s proposal to help make it easier for individuals and businesses to get their tax correct through online software and staying up to date on their affairs. However, we understand that sharing data online can cause major security and cybercrime concerns.
Making Tax Digital timeline
Back in April 2019, businesses with a VAT threshold of £85,000 and over were required to file their tax returns to HMRC, through appropriate accounting software. Whether you are a business owner, self-employed or landlord, if you fall within the VAT threshold, you will have to keep digital records and provide quarterly updates to HMRC for VAT purposes.
However, from April 2022, the next phase of HMRC MTD plan comes into effect, meaning that businesses VAT registered with turnover of below £85,000 are now included within the MTD scheme. As a result, from their first VAT period starting on or after 1 April 2022, these businesses will be required to both file their VAT returns online using accounting software like Xero or Freeagent. But also to keep their records digitally which can be done by using the in-built tools within Xero or in partnership with a program like Dext.
With one eye on the future, from April 2024, businesses, self-employed people and landlords with chargeable income in excesses of £10,000 per tax year will also be caught by the MTD rules. This change represents one of the biggest fundamental changes to the way people report their taxes in recent history. Therefore, if you are not currently using online software and instead using spreadsheets, now is the time to start planning for April 2024.
Record Keeping Checklist & MTD Guide for UK Landlords
Sharing data and security concerns
To minimise any chance of this potential risk, we have put together our top tips on how to ease your concerns when it comes to Making Tax Digital.
Our top tips to minimise cybercrime
- Invest in anti-virus software- installing and turning this on for all computers and devices will infect legitimate software/ prevent users from downloading unauthorised third-part apps.
- Utilise strong passwords and change them often. Avoid using the same and easily guessable passwords. Also, use two-factor authentication for vital accounts.
- Make sure the MTD software is up to date. The software provider can give updates
- Encourage your team to report all cyber-attacks or potential risks. If you are unsure then consult an expert there and then!
- Have a long-term plan for responding to cybersecurity attacks. This should include verification of the damage caused by the attack, reporting the incident to an appropriate national authority and finally testing your data backup and systems!
If you wish to discuss how Cardens can help you with Making Tax Digital, call us today on 01273 739592.
