Making Tax Digital (MTD) is a new regulation from HMRC around handling tax for UK businesses and is set to go live, with effect on 1st April 2019.
HMRC has set this date as the compliance deadline. This new change affects all businesses operating in the United Kingdom with a taxable turnover exceeding the VAT (Value Added Tax) threshold of £85,000. Businesses with taxable turnover between 85,000 and 10,000 have a little more time before required participation. Businesses under £10,000 are exempt.
What is Making Tax Digital (MTD)?
This is HMRC digitalising tax reporting to make the process more efficient in reporting and payment. It will take away manual completion and submission of forms which are open to human error, for examplethe current VAT portal most businesses use for their quarterly submissions. It will be mandatory and whilst starting with VAT returns via MTD from 1st April 2019, a year later in April 2020 are plans to announce further rollouts for Income Tax and Corporation Tax processing.
What do you need to do to ensure you’re ready for MTD?
SAP Business One V 9.3 will have the functionality built into it for the planned deadline, however it is important to plan ahead and prepare should you need to upgrade. If you’re already running on SAP Business One V9.3 or have it planned in, your business is as ready as it can be. SAP will release the official patch (PL08) which will have the required functionality to link to the new platform and transfer the records digitally.
If you’re on a lower SAP Business One family release (Prior 8, 8.x, 9.0, 9.1 or 9.2) then you should be considering your plans of upgrade imminently to avoid potential complications and delays.
You may wish to consult with your accountant or HMRC directly to gain further information and insight to help you in making decisions and plans around MTD. Some businesses with more complex tax arrangements can make a request to HMRC to have their MTD start date deferred by 6 months.
If you would like to join the conversation on MTD please join our Milner Browne Discussion Group on https://www.linkedin.com/groups/3298060/ where we will welcome further debate and discussion.