Making Tax Digital

Making Tax Digital (MTD) is a transformational approach to taxation from HMRC. The first change is coming in 2019 and will affect every organisation from how you run your processes to how your systems are set up to record and report on tax.

In April 2019, Making Tax Digital (MTD), HM Revenue & Custom’s (HMRC’s) strategy to modernise the tax systems will go live.

MTD will involve a move to digital record keeping and reporting by taxpayers and the improvement of HMRC’s own internal systems to collate relevant information into one digital tax account for each taxpayer.

HMRC has set out its intentions to become one of the most advanced tax authorities in the world whereby enhancing the customer experience whilst also closing the tax gap. Making Tax Digital (MTD) covers both individuals and businesses across several tax types. For businesses over the VAT registration threshold, VAT is the first tax selected for digitalisation in the UK. This will take effect from 1 April 2019. For Income Tax and Corporate Tax, MTD will not be mandated until April 2020 at the earliest.

At present, most businesses submit their VAT returns through manually re-keying figures into HMRC’s online portal. In line with the move towards digital, the online portal will close from April 2019 and taxpayers will no longer be able to submit VAT returns this way. Instead, all submissions must be done digitally via HMRC’s Making Tax Digital API (Application Programming Interface).

There are two principles that businesses need to be aware of:

  1. Keep digital records for VAT purposes – a full digital record of your VAT information is required to be held on one digital system. This must also show your sales which had had VAT applied, including the date of sale, the value of sale and the rate of VAT applied.
  2. Provide detailed VAT return information – there will be a new requirement to provide VAT information to HMRC with Making Tax Digital compatible software and not through the current HMRC portal. Many solutions including some Microsoft Dynamics products will be updated to comply with the new requirements and there will be a bridging solution available.

Our MTD and Microsoft Dynamics Guide

Download our guide to understand the impact of MTD for Microsoft Dynamics users. Our guide provides information for Dynamics AX, Dynamics NAV, Dynamics GP and Dynamics 365 users.

Download our guide »

Which versions of Dynamics will be compliant

In our article we highlight which versions of Microsoft Dynamics and Dynamics 365 will be receiving a Making Tax Digital  update from Microsoft

Visit our article »

HMRC Overview

HMRC has released guidance on MTD on their website with information for businesses and individuals.

Visit the website »

Microsoft Statement

Read a statement from Microsoft on Making Tax Digital.

Microsoft Statement »

Our Services

Incremental Group is a Microsoft Gold Partner for ERP. With 20 years experience our business has been offering first class services across the Microsoft Dynamics range. Our large team of ERP and finance consultants and developers will be on hand to deliver your project to the highest standards. We offer a range of services to support Microsoft Dynamics users on their Making Tax Digital journey.

MTD Readiness Assessment

Our Readiness assessment will review your current system and provide you with a detailed plan to get MTD compliant. It will involve one of our finance consultants reviewing your processes, reports and systems to identify any gaps and propose the best solution for you.

Making Tax Digital Assessment

Upgrade

We provide a range of upgrade services for Dynamics AX, NAV and GP to ensure you are on the latest version from Microsoft. You will recieve an MTD update from Microsoft which will help you on your road to compliance.

Dynamics AX upgrade

Customisation

Our application team will develop you a personalised customisation that will allow your system to connect to the MTD portal via a new API. We will develop a simple interface, custom reports and set up the connection.

Enquire today

Enquire

Tax Simplified

Tax in one place

Making tax digital for business

Making tax digital for individuals

Four Foundations of Making Tax Digital

1. Better use of information

Making Tax Digital presents significant benefits to UK businesses. It will mean that businesses will not have to give HMRC information that it already has, or that it is able to get from elsewhere, for example, from employers, banks, building societies and other government departments.

Digital tax accounts for all will mean that businesses can see the information that HMRC holds and be able to check at any time that their details are complete and correct. HMRC will use this information to tailor the service it provides, according to each of its users individual circumstances.

2. Tax in real time

Businesses and individuals should not have to wait until the end of the year or longer to know how much tax they should pay. This will benefit tax payers as it should help prevent errors and stop under and overpaying tax.

3. A single financial account

At the moment most taxpayers cannot see a single picture of their liabilities and entitlements in one place – HMRC are changing that. By 2020, taxpayers will be able to see a comprehensive financial picture in their digital account, just like they can with online banking.

4. Interacting digitally with customers

Taxpayers, organisations and their accountants will be able to interact with HMRC digitally and at a time which suits them. They already have access to a digital account which will present them with an increasingly personalised picture of their tax affairs, along with prompts, advice and support through webchat and secure messaging. In addition, digital record keeping software will be linked directly to HMRC’s systems, allowing customers to send and receive information directly from their software.

The Making Tax Digital roadmap, published in December 2015, set out how this bold vision for the future of the tax system would be achieved by 2020.

Making Tax Digital Roadmap

Discover our Microsoft Dynamics services

Dynamics »