Whether you’re a business owner or accountant, the UK’s new Making Tax Digital initiative is the UK’s biggest tax shake-up in a generation.
In this blog we’ll explain what it is, when it’s happening and more about Microsoft Dynamics 365 Business Central the complete finance management solution that is now approved by the HMRC. As an agile software, it is constantly undergoing innovative updates to improve user experience and value.
The business benefits of the Making Tax Digital Initiative
- Digitisation of finances will improve the quality of record keeping and reduce errors
- Managing business affairs will become more efficient and can be accessed anywhere
- Data automation will enable you to spend less time gathering and inputting data
The Making Tax Digital requirements from the HMRC
If you have a VAT registered business with revenue over the current VAT registration threshold of £85,000, there are two things you must do as per April 2019 when the new Making Tax Digital initiative goes live.
- Submit your VAT return to HMRC via a specified Making Tax Digital approved software – such as Microsoft Dynamics 365 Business Central
- Tax Returns submitted by post will soon be phased out
- Keep your records digitally using approved software solutions – Companies with certain types of finance software have not been able to do this previously.
What’s the solution?
You can implement any finance management solution that the HMRC have added to their approved Making Tax Digital list that fully integrates with the HMRC API. Both, Microsoft Dynamics 365 Business Central and Microsoft Dynamics NAV are now included as approved solutions.
What are the Making Tax Digital features in Business Central?
Microsoft Dynamics 365 Business Central is an all-in-one business management solution that’s easy to use and adapt, helping you connect your business and make smarter decisions. Business Central has many features and useful functionality that supports Making Tax Digital all of which fall within these categories:
- Visibility into your VAT obligations – Dynamics 365 Business Central can access to your company’s VAT obligations through the HMRC’s systems in a secure way. We now retrieve them and store them inside the system and call them “VAT Return Periods”. This lets you know about current VAT obligations, which period should be reported and when.
- Creating VAT returns based on VAT obligations – Because Microsoft Dynamics 365 Business Central has the start- and end dates of your VAT obligations you do not need to enter any dates when creating a new VAT return. Having the VAT obligation in the system allows for an easy one-click creation of a VAT return.
- No more forgetting to file the VAT return -Microsoft Dynamics 365 Business Central knows the date your VAT return is due.
- Submitting the VAT return to HMRC – After the VAT return is created, Dynamics 365 Business Central can calculate the numbers to report in the VAT return.
- Viewing your VAT liabilities and payment – The HMRC is also making your VAT liabilities retrievable through APIs that feed into Dynamics 365 Business Central. Within the platform you can easily view them so you have a realtime overview of your VAT payment status with the HMRC.
When will these features become available?
Microsoft has reported that existing users of Microsoft Dynamics 365 Business Central should have access to these new features outlined above by the end of 2019. Please note: The functionality may vary from versions to version because of technical differences in the versions spanning from Dynamics 365 Business Central down to Microsoft Dynamics NAV 2015. If you are interested in implementing Microsoft Dynamics 365 Business Central or finding our more about the Making Tax Digital initiative please get in touch.