LONDON – August 3rd, 2022 – Sage (FTSE: SGE), the leader in accounting, financial, HR, and payroll technology for small and mid-sized businesses, is now a recognised provider on HMRC’s official list of software compatible with Making Tax Digital for Income Tax Self-Assessment (MTD for ITSA).
MTD for ITSA will apply to unincorporated sole traders and landlords from April 2024, if their annual business or property income exceeds £10,000 in a tax year.
To be compliant, businesses and property owners will need to make records digital using MTD for ITSA-compatible software that allows them to:
- Capture digital records
- Categorise transactions
- File periodic updates with HMRC (which must be submitted at least quarterly)
- Submit an End of Period Statement (EOPS)
- Submit a Final Declaration tax return
Sage customers will be able to easily meet all five elements and ensure they comply with the HMRC regulations through a new easy to use Taxes dashboard.
Built to enable accountants and small businesses to successfully navigate the significant challenges posed by the new compliance requirements of MTD for ITSA, the Taxes dashboard will allow users to easily review and submit their quarterly updates, as well as their End of Period Statements. It will also provide visual indicators to show if submissions are overdue and need attention. Another key benefit of the Taxes dashboard is that it will allow businesses to better predict and plan what income tax they owe by providing real-time estimates throughout the year.
With these features, accountants will be able to increase efficiency, get ahead and expertly plan on how to best support their clients to adapt to the new legislation.
“MTD for ITSA will be a significant challenge for many sole traders and landlords who might struggle to comply with the significant changes imposed by MTD for ITSA. Their bookkeepers accountants will be playing a critical role in helping them stay compliant, fulfil these reporting stages and adapt to the changes in legislation quickly and efficiently,” said Neal Watkins, EVP Product, Sage.
“Developed with accountants and small businesses in mind, our Taxes dashboard will ensure that compliance is a painless process. It will also enable sole traders and accountants to save time and resources, and gain better visibility of their future liabilities resulting in more accurate cashflow forecasts to proactively manage the health of their businesses”
To fulfil the digital record keeping element of MTD for ITSA, transactions will be accurately and efficiently categorised and saved to the ledger.
Transactions can be added and captured in any format: manually, imported from a bank feed or a CSV file. Also, data can be reviewed and downloaded to CSV if required.
Once submitted, the information can be reviewed and resubmitted at any time if necessary. This enables customers to easily correct errors and improve data accuracy i.e. for categorisation, splitting across multi categories, allocating as ‘allowable’ or ‘disallowable’ for appropriate tax treatments, etc.
The dashboard also provides users with a helpful estimate of their income tax liability and alerts them to anything that may require action in a ‘Tax calculation messages’ box.
The application will be available both in browser and on mobile, providing access to data anywhere, anytime, on any device.
“Sage has a long history of guiding businesses and supporting accountants through legislative change. Having the ability to fulfil all the steps required by MTD for ITSA with one, simple and intuitive solution is a massive competitive advantage. We’re continuously striving to save time, reduce risks and streamline our operations which Sage is fulfilling with their MTD solution,” said Sam Mitcham, owner of SJCM Accountancy, the agent who submitted the first ITSA update for Sage.
“This, in turn, improves our clients’ understanding of their own business, enlightens them to the broader benefits of being more digital and ultimately improves the accuracy and completeness of the information presented plus the assurance that they’re getting it right, every time.”
Key benefits of the new Taxes dashboard
Providing best-in-class capabilities to improve the efficiency and simplicity of tax Sage makes it easier for businesses to get their tax right by enabling them to:
- Track taxes with a tap - Managing tax and compliance electronically is made much easier via digital record keeping and accounting software.
- Keep digital records - Simple and fast data entry and retrieval save business owners significant time and effort. They can avoid duplication with one set of data serving as a ‘single source of truth’ and have the ability to combine and query the information to ultimately make better business decisions.
- Access accurate data - Minimising errors, as the software helps businesses enter information in the right format at the right time, automating many processes (such as filing tax returns).
- Work together and share access easily – Small businesses and their accountants can collaborate securely in real-time on any device.
- Control cashflow - With real time tax estimates throughout the year, sole traders and landlords can better predict and plan what they owe.
Sage exists to knock down barriers so everyone can thrive, starting with the millions of small and mid-sized businesses served by us, our partners, and accountants. Customers trust our finance, HR, and payroll software to make work and money flow. By digitising business processes and relationships with customers, suppliers, employees, banks, and governments, our digital network connects SMBs, removing friction and delivering insights. Knocking down barriers also means we use our time, technology, and experience to tackle digital inequality, economic inequality, and the climate crisis.