Making Tax Digital VAT Groups Deadlines

Making Tax Digital (MTD) is HMRC’s strategy to modernise tax systems. It involves a move to digital record keeping and reporting by taxpayers – through the improvement of HMRC’s own internal systems to collate relevant information into one digital tax account for each taxpayer. Now, the deadline for VAT group returns is nearing, when it is mandatory for groups to use compliant software to send their VAT returns to HMRC using the new Making Tax Digital portal.

Group VAT Making Tax Digital Deadlines

October 2019

VAT groups are mandated to join MTD for VAT from 1 October 2019.

October 2020

For VAT groups, the links between the software must be digital from 1 October 2020 for the software to be considered functionally compatible for MTD. This is when HMRC’s soft landing period ends and the requirement for a digital connection into underlying records, such as purchase and sales ledgers, comes into force.

Digital Links

For VAT groups, another point worth noting is that HMRC announced a soft-landing period of 12 months. During this period, some existing processes will be allowed. However, digital links will be mandatory by October 2020. VAT Groups still need to report on VAT digitally during this period, but for now, spreadsheets and manual processes can be used to calculate the figures. Organisations will need to look at finding a way to digitally update their processes to remove the possibility of manual error.

Bridging solution for VAT Groups and Microsoft Dynamics

Since Microsoft does not offer an upgrade to Dynamics products to comply with group VAT submissions, we have developed an MTD for VAT Groups Module for Dynamics, that connects your Dynamics finance system to the HMRC API and provides an intuitive and compliant mechanism for submitting group VAT.

Download our guide ‘Making Tax Digital for VAT Groups and Microsoft Dynamics’ to learn more or visit our Making Tax Digital Hub.