Making Tax Digital (MTD) is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right.
HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world. MTD is making fundamental changes to the way the tax system works. It’s transforming tax administration so that it is:
- more effective
- more efficient
- easier for tax payers to get their tax right
The Making Tax Digital VAT Timeline
October 2018 – Open to sole traders and companies (except those which are part of a VAT group or VAT Division) provided they’re up to date with their VAT. Companies whose customers have had a default surcharge within the last 24 months will be able to join the pilot by the end of October 2018.
However, the following groups are unable to join at this point. Those who:
- trade with the EU
- are based overseas
- submit annually
- make payments on account
- use the VAT Flat Rate Scheme
- are newly registered and have not previously submitted a VAT return
Late 2018 – Private testing begins with partnerships and those customers that trade with the EU.
Late 2018/early 2019 – Open to other sole traders and companies who are not up to date with their VAT, users of the Flat Rate Scheme and businesses newly registered for VAT that have not previously submitted a VAT return.
Early 2019 – Open to partnerships and those customers that trade with the EU.
Spring 2019 – Pilot open for Making Tax Digital customers that have been deferred.
April 2019 – Making Tax Digital mandated for all customers (except those that have been deferred).
October 2019 – Making Tax Digital mandated for customers that have been deferred. The 6-month deferral applies to customers who fall into one of the following categories:
- ‘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 Trusts)
- local authorities
- public corporations
- traders based overseas
- those required to make payments on account
- annual accounting scheme users
The deferral will apply to around 3.5% of mandated customers.
MTD & SAP B1
SAP are in the process of creating a solution. This will address the requirements for digital communication forms with HMRC for SAP Business One.
SAP Business One version 9.3 PL08 will contain a solution with application changes relevant for MTD compliance and readiness. Therefore, all SAP Business One users will need to upgrade to 9.3. Companies already on version 9.3 will simply need a patch upgrade. If you aren’t on version 9.3 you must upgrade before the end of January 2019 so that you are ready for patch 08 when it’s released.