Making Tax Digital

August Update

The last update statement on the Making Tax Digital for VAT program was made available on 13th July by HMRC. Although the MTD scheme was not deferred as the analysts originally expected, HMRC have deferred full digital submission and backed down slightly on their aspiration by allowing a year of ‘soft landing’ for submissions – this effectively means you can log on to the new HMRC portal and copy and paste the 9 box Tax return from Excel into the HMRC portal without any risk of reprimand from HMRC.

It’s only from the following year (2020) that a direct software submission will be compulsory.

The 13th of July update and subsequent access granted to the development portal has empowered the software world with the knowledge they need to make the necessary software arrangements to assist their customers with understanding & planning for the change.

There are several fundamental points for businesses and ERP vendors to consider, these will be explored in the next update in September 2018.

Most businesses have a single VAT number and are required to perform a submission of a single 9 box VAT return, but:

• If the business runs multiple companies or ERP systems which then generate multiple VAT Return reports, the VAT reports then need to be consolidated into a single auditable submission.
  1. This may mean the SYSPRO ERP solution cannot carry the burden of submission as it has no awareness of other ERP’s VAT statuses.
  2. It may be that a middleware product is required to pull the information from multiple ERP’s, then provide a summary for posting.

We will be exploring these options, plus the requirement to collect and post VAT returns digitally into other EU Digital VAT solutions, such as Spain, Hungary & Italy who have already moved to more detailed levels of digital tax and record submission.

We hope to have the next update prepared for the September K3 Customer Newsletter and will be making further announcements at the K3 Customer event in Coventry in October.

March Update

We are starting to receive an increasing number of enquiries asking for confirmation of what K3 and SYSPRO are planning to do in order to assist Businesses with the UK Governments ‘Making Tax Digital Program‘. You will find more on the program here.

The aim of the initiative is to provide businesses of a certain size with the ability to submit their VAT returns electronically from the 2019 Tax Year. The solution is planned to provide the future foundation for UK Digital Tax submissions.

Following the announcement by the UK government’s Public Accounts Committee into HMRC’s performance in 2016/17 there is currently speculation around when the solution will actually be available, the report noted that the “HMRC’s transformation program is not deliverable as planned due to unrealistic assumptions,” and “HMRC again told us that it is not credible to continue with its transformation program as it is.”

At present a mechanism for submitting VAT data is not available to test and the assumption now is that the initiative will not be available until 2020.

What we can confirm is that SYSPRO by design has the inbuilt capability to extract electronic data using the IMPQTS business object and once the MTD platform is available we will have solutions available to allow SYSPRO Businesses to submit their VAT data in a controlled and valid way.

Please watch out for further updates from us on ‘Making Tax Digital’ and what it means to SYSPRO and your business. If in the meantime you would like to discuss, please contact Darren Edwards SYSPRO Product Manager, darren.edwards@k3btg.com.