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Making Tax Digital & SAP Business One

Making Tax Digital is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs.

HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world. Making Tax Digital is making fundamental changes to the way the tax system works – transforming tax administration so that it is:

  • more effective
  • more efficient
  • easier for tax payers to get their tax right

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 are up to date with their VAT. Those who trade with the EU, are based overseas, submit annually, make payments on account, use the VAT Flat Rate Scheme, and those newly registered for VAT that have not previously submitted a VAT return, are unable to join at this point. Those customers with a default surcharge within the last 24 months will be able to join the pilot by the end of October 2018.

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: trusts, ‘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 and annual accounting scheme users. The deferral will apply to around 3.5% of mandated customers.


With effect from 1 April 2019, businesses operating in the United Kingdom (UK) with a taxable turnover exceeding the VAT threshold of £85,000 will need to comply with Making Tax Digital (MTD). MTD is an initiative to fulfil the following three key requirements:

  1. Digital record keeping – ensuring all transactions are stored in an electronic form
  2. Digital links – supporting digital links between final numbers and source data
  3. Digital submissions – all submissions are to be made using HMRC’s approved software

SAP are in the process of providing a solution to address the compatibility 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.  This means that all SAP Business One users will need to upgrade to 9.3.  Companies already on version 9.3 will simply patch upgrade.  If you are not yet 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.


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