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5th April 2019

Making Tax Digital: How to avoid the cyber crime threat

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Making Tax Digital (MTD) is expected to deliver a more efficient tax collection system for HMRC, but concerns have been raised around the cyber security vulnerabilities that will emerge. 

Many companies are upgrading their existing – or adopting new – accounting packages in order to deliver VAT returns in the required format requirement. Advertisement

However, the Treasury Select Committee has warned that many businesses are unprepared for digital tax processes and as a result will be vulnerable to exploitation by cyber criminals. Here’s how accountants can help themselves and their clients avoid the potential risks. 

As dictated by MTD legislation, all VAT submissions must be submitted electronically to HMRC from April 2019. For many small to medium businesses management of VAT has historically been handled on spreadsheets and then submitted via the HMRC web portal manually.

However, from April the HMRC portal is being withdrawn and submissions will need to be undertaken using MTD compatible software, and electronic records maintained. Some organisations will not currently be using an accounting package, while others may have a solution that is not MTD compatible, which will need to be upgraded, or replaced.

In either case an organisation must consider the following with regards to a system’s usage and operation:

  • Is it protected from cyber-attacks?
  • Is access to data restricted to only the staff that need access?
  • Are you processing clients’ personal information in accordance with the UK Data Protection Act 2018 and GDPR? Where you use third parties to host or operate your solution, have you fulfilled your responsibility to verify that the supplier is protecting the data appropriately and meets it data protection obligations?
  • Are you and your suppliers’ staff trained to deal with cyber security threats, can they protect data appropriately and are they aware of their data protection/GDPR obligations?

The full article was originally posted on AccountingWEB.