Making Tax Digital

In its mission to become one of the most digitally advanced tax administrations in the world HMRC are implementing the Making Tax Digital for VAT initiative which will take effect from 1st April, 2019. This initiative will affect a large proportion of VAT-registered businesses.

MTD - Will it affect me?

Will it affect me?

If your organisation is a VAT-registered business with a taxable turnover above the VAT threshold (i.e a turnover above £85,000) then you will be required to use the Making Tax Digital service to keep records digitally and use software to submit your VAT returns from 1st April, 2019 onwards.

The exception to this is for a small minority of HMRC customers who fall into one of the following categories: trusts, ‘not for profit’ organisations that are not set up as a company VAT divisions, VAT groups, those public sector entities required to provide additional information on their VAT return (government departments, NHS Trust), local authorities, public corporations, traders based overseas, those required to make payment on account and annual accounting scheme users. The deferral will apply to around 3.5% of mandated customers. For these customers, HMRC will be delaying mandation until 1 October 2019 to ensure there is sufficient time for testing the service with them in the pilot before they are mandated to join.

Can I do this through my Dynamics NAV system?

In short, yes.  HMRC is maintaining a list of software products that support Making Tax Digital and Dynamics 365 Business Central and Dynamics NAV are on that list. This means that the HMRC has been presented with a demo of the solutions and has confirmed tests integrating NAV and BC to their APIs. Microsoft are currently working on a Cumulative Update which will give the necessary functionality for Dynamics 365 Business Central and Dynamics NAV 2018, 2017, 2016 and 2015. There will be some work required to merge the functionality into your system; we will extract the required components from the Cumulative Update and implement them in your system.

What if I’m on a version of NAV which is not supported?

Don’t worry - The NAV People are in the process of building an add-on solution which will provide the necessary functionality for versions of NAV pre-2015. This solution will be available toward the end of this year.

MTD - What do the Making Tax Digital features in NAV and Business Central look like?

What do the Making Tax Digital features in NAV and Business Central look like?

Dynamics NAV and Dynamics 365 Business Central are now on HMRC's list of software products that support Making Tax Digital which means that the HMRC has been presented with a demo of the solutions and has confirmed tests integrating NAV and BC to their APIs.

The features which support compliance are:

  • Visibility into your VAT obligations
  • Creating VAT returns based on VAT obligations
  • Reminding users of upcoming VAT obligations
  • Submitting the VAT return to HMRC
  • Viewing your VAT liabilities and payment
Learn more about the features

What should I do now?

The most important thing is to sign up to register your interest in how The NAV People can help you with Making Tax Digital compliance.  By signing up we will keep you informed on next steps and what you need to do in order to achieve compliance. There will also be a session on Making Tax Digital at our Annual User Day on 15th November. You can sign up here to attend and learn more!

Finally, if you want to know more about the foundations for Making Tax Digital, please see this page from the UK government.

Register your interest
MTD - Some things to think about in the meantime!

Some things to think about in the meantime!

Dynamics NAV and Dynamics 365 Business Central offer features to help you with your MTD compliance but in order for these features to work you will need to already be fully managing VAT through your system.  Below are some things to consider as you prepare for MTD.  If you answer ‘no’ to any of these questions you should speak to your Account Manager or contact us to get all your ducks in a row to allow the MTD functionality to work once implemented in your system.

  • Is your VAT statement set up in NAV?
  • Do you calculate and post your VAT settlement in NAV for each return period?
  • Do you agree your VAT statement to your General Ledger each month end?
  • Do you avoid making any changes to your VAT return outside of NAV before submitting it?
  • Can you confirm that you have not had any bespoke work done around your NAV VAT statement (e.g. multiple legal entities in 1 NAV company)
  • Have you kept your renewal up-to date?
Making Tax Digital - Register your interest

Keep me informed about Making Tax Digital!