We will work with software providers to ensure their products calculate tax obligations that provide businesses and their advisors with confidence and certainty. Inland Revenue will develop the specifications required from a software program before it can be offered to the market place, and will hold the right to audit any software.
For those who keep their accounting packages up to date throughout the year, calculating a business’ provisional tax liability during the year will be not require any significant additional work for businesses and their advisors. For those who currently leave most of their tax adjustment calculation until year end, AIM will require more consideration of these adjustments throughout the year; however this should be offset by a reduced year-end workload. Software will use up-to-date figures, where appropriate, and a mix of prior year figures and current year estimates in a provisional tax calculation.
Making software intuitive and simple to use must be balanced against the need for accurate tax calculations. We expect software to offer prompts and alerts to help businesses provide the right information, as this will encourage accuracy and build confidence in the tax calculation.
“I like knowing there would be a copy of my provisional tax records stored within my accounting software”
For more detailed policy analysis and further feedback opportunities in relation to the use of accounting software by businesses and how it affects the relationship between a business and their tax advisor click here