Making Tax Digital for VAT

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!

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Is your business ready?

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!

Can I do this through my Dynamics NAV / Business Central system?

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.

Talking you through the options

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!

Use the MTD Excel Bridge!

The MTD Excel Bridge is an excellent, quick and cost-effective way for you to become MTD compliant and can be used with all versions of Dynamics NAV and Dynamics 365 Business Central.

It allows you to install an Excel add-in, giving you the ability to transmit your VAT Returns to HMRC directly from Excel. In order to be fully MTD compliant you need to be able to get your VAT information into Excel in an automated way - we recommend that you use Jet Reports to achieve this automation. Our MTD Excel Bridge add-in has inbuilt integration with Jet Reports to make this even easier for you. (If you don’t have Jet Reports then you’ll need to find an alternative mechanism to pull the relevant data into Excel).

How much does it cost?

£300 per organisation per year. If you are interested in our MTD Excel Bridge, please don't hesitate to get in touch with us.

What versions of Dynamics NAV, Dynamics 365 Business Central, Excel & Jet will it work with?

- All versions of Dynamics NAV and Dynamics 365 Business Central
- Excel version 2013 or later
- Works with Jet Reports (but not Jet Basic - which is the free version).

VAT Statements

In order for the MTD Excel Bridge to work you will need to have VAT Statements in your Dynamics NAV or Business Central system set up correctly and be using them. We offer financial consultancy if you need help with setting up your VAT Statements.

Accessing the MTD Excel Bridge

If you are interested in purchasing our MTD Excel Bridge, please do get in touch with your Engagement Manager or contact us here.