The Making Tax Digital for VAT took effect on 1st April, 2019 and impacts a large proportion of VAT-registered businesses. Here we'll take you through what you need to know and how you can use your Dynamics NAV / Business Central system to comply!
As of April 2021 UK VAT registered businesses need to ensure they are fully compliant with the original Phase II postponed requirements that were delayed from 1st April 2020 due to COVID-19.
What is Phase II?
VAT registered business with a taxable turnover above the VAT threshold (£85,000) are now required to follow the Making Tax Digital rules by keeping digital records and using software to submit the VAT returns. If you are below the threshold you can voluntarily join the MTD service now.
For VAT periods commencing on or after 1st April 2021 all sales, purchase, stock, cash and fixed asset transactions and associated VAT must be digitally recorded i.e. in Dynamics NAV. The data can then be transferred between software programs or applications by digital means.If you're unsure, get in touch!
In short, yes. HMRC is maintaining a list of software products that support Making Tax Digital and Dynamics 365 Business Central and Dynamics NAV are on that list. This means that the HMRC has been presented with a demo of the solutions and has confirmed tests integrating Dynamics NAV and Dynamics 365 Business Central to their APIs.
If you are on either Dynamics 2018 and Dynamics 365 Business Central then your system already has all the necessary MTD functionality included (hurrah!) If you are on an earlier version of Dynamics NAV (i.e prior to Dynamics NAV 2018) you will need to decide on your preferred route to become compliant.
Check out this video which talks you through the various solutions we offer to help with this. We also cover what the MTD requirements are, the HMRC's MTD roll-out timeline and clarify what exactly a 'Digital Link' is!