Talk to the Taxperts

01382 312100

Making Tax Digital – EPOS For Retailers

Making Tax Digital (MTD) is now well under way, and although many clients have adopted accounting software which allow them to submit their VAT returns under this scheme, they may not be prepared for the wider requirements of MTD.

Under MTD, businesses who met the requirements must submit VAT returns through appropriate API linked software or by using a bridging software solution, rather than through the HMRC portal system. Whilst most software packages will now have released MTD updates, businesses should also be aware of the information entry requirements of the scheme.

MTD requires all individual supplies made and received to be identified within the accounts package, however, HMRC have acknowledged that within retail, to identify each individual sale will be nearly impossible. HMRC commented;

“Retail scheme users will, by HMRC notice or direction, be permitted to record electronically sales transaction data based on daily gross takings, rather than recording details of each sale.”

The end of the weekly cashsheet

Traditionally, retail clients would total their z-readings on a weekly or monthly spreadsheet for the period, which were then posted on as a period total into the accounts system.

Within the rules of MTD, HMRC are keen to stop any manual reprocessing of data, as stated the guidance on ‘Digital Links’;

“Once data has been entered into software used to keep and maintain digital records, any further transfer, recapture or modification of that data must be done using digital links.”

This means once data has been captured, and recorded, any further processing must be by a digital form and not processed manually.

In order to comply with MTD, the daily z-readings will need to be processed directly into the accounts, rather than a summary of the period, resulting in an increased amount of administration of the accounts system.

The future is digital

In order to prepare for these changes, it may be beneficial for a business to consider upgrading their current till to an Electronic Point of Sale (EPOS) system.

Once set up, an EPOS system will comply with the requirements of MTD, as the individual transactions are recorded within the system itself, and by extension, the gross daily takings. Due to the fact that the source information is stored digitally, it will still be possible to process the periodic sales totals onto the accounts.

Many EPOS systems offer integration with existing accounts packages, meaning they can automatically post the corresponding accounting entries into the accounts package, removing the need for manual processing.

EPOS systems offer many reporting functions surrounding sales as the system will be updating the accounts on a daily basis, keeping the financial figures up to date which will facilitate more timely reporting. This allows detailed analysis of sales and trends to be performed quickly and easily.

We are currently going through the soft landing of MTD, and with many issues to consider when reviewing a business’ compliance, now is the time to prepare your business for the next stage.

For more information on how the next stage of MTD will affect you, or to discuss your circumstances, please contact the Making Tax Digital Taxperts.

Latest News

View all latest news

March 15, 2024

Final opportunity – Urgent planning deadline for the transition to the ‘tax year basis’

Speed read Any individual who is a sole trader or partner in a trading or professional partnership will be taxed under the new ‘tax year basis’, which means…

February 29, 2024

Tax Planning Tips Ahead Of The New Tax Year

With the end of the financial year drawing close, now is the time to evaluate your tax position for the year to 5 April 2024 to ensure that…

Download our EQ app and keep up to date with tax news, changes and have access to our EQ Portal, tax calculators and key tax dates at your fingertips. Click on the relevant button on your device to download our free app.

Visit EQ Accountants Visit EQ Accountants

Explore the full range of EQ Expertise