When it comes to MTD, there is no ‘one size fits all’ solution, there is a multitude of different options available. However, some of these solutions are not a long term fix. They will only get you so far, until April 2020 to be precise.
There is strong argument for moving to a fully functional and compliant, Making Tax Digital for VAT software from day 1. Doing so will mean you can be sure that you are fully meeting the regulations, with no need to update or upgrade your software. This is exactly what we are offering with our solution – TrAX Digital for IFS. It is a cloud based solution with only 3 component parts:
- The IFS MTD Agent – a small software program that resides on premise and has very little footprint. This is the conduit between IFS and our cloud solution.
- The API – a secure web API hosted in Azure that lives ‘in the cloud’.
- The CS MTD web application – hosted in Azure providing an easy to use console to view MTD information and provides the integration with the HMRC APIs for both sending and receiving VAT related data.
Only the IFS MTD Agent needs to be installed on your server so that it can access both IFS and have internet connectivity. The agent communicates over HTTPS with SSL encryption to the Cooper Software Cloud API so there is no risk to data.
Why choose a cloud solution? Firstly, it’s future proof.
Why did we choose to develop a cloud-based solution? A key driver for us was ensuring we could provide a solution that will benefit customers now and in the long term. If we went entirely on premise, our solution would have to account for the different IFS versions currently in use by UK customers. Furthermore, HMRC have stated they will be adding further requirements to the process once the initial launch has settled down. If you choose a non-cloud solution you will have to continually install updates and patches for any bug fixes or new functionality. A single solution in the cloud allows us to respond more flexibly to changing requirements (from both you, as customers and from HMRC) but also provide a level of support to customers that befits a business-critical solution.
When addressing the subject of the cloud, David Mitchell Smith, VP and Gartner Fellow commented: “As it enters its second decade, cloud computing is increasingly becoming a vehicle for next-generation digital business, as well as for agile, scalable and elastic solutions. CIOs and other IT leaders need to constantly adapt their strategies to leverage cloud capabilities.”
The notion that the cloud is unsecure is outdated. In truth, many organisations (ourselves included) run their business on software hosted in the cloud. These days, 70% of businesses run at least one application in the cloud. Guaranteeing the security of your data is the number one priority for cloud service providers. IFS themselves offer a cloud version of their software and in their Q3 2018 results they reported a six-fold increase in Cloud and SaaS revenue. Companies like Xero, Sage and QuickBooks all offer fast and efficient cloud-based accounting software, the benefits of this approach far outweigh any security concerns.
To guarantee security, the data within our MTD application can only be viewed by an authenticated user. We use OAUTH2.0 token-based authentication to ensure a secure authentication. This token contains a unique identifier to ensure only data relevant to the user is able to be accessed. Once authenticated, the user can access the MTD console and submit VAT returns to HMRC after confirming the data.
It’s flexible, or as we like to say ‘elastic’
A solution such as this needs to be “elastic”. That is, there will be many periods throughout the month/quarter that the solution will have little demand. However, given the nature of tax reporting, there’s likely to be days in the month where the solution is suddenly in high demand. Everyone is logging on at the same time to perform the same function. This could cause problems if the solution is not properly engineered and not on a platform that supports such peaks and troughs. Our solution has been architected and designed to be robust enough to cope with surges in demand. What’s more, because it is in the cloud, its high availability is a given.
It requires very little on-going IT support
Another advantage of our MTD solution being hosted in the cloud is that it is one less application for your internal IT team to support. There’s no specialist training required to maintain the solution, nor are there any hidden costs associated with upgrading or enhancing the solution. The solution automatically upgrades as and when a new version becomes available, ensuring minimum downtime, which is essential for a business critical application such as this.