Are You Ready to Make Your Tax Digital with Dynamics?

Do you use Microsoft Dynamics? Come April 1st, are you confident you’ll be fully compliant with Making Tax Digital?

Here’s our quick guide to what you need to know.

In a Nutshell: Making Tax Digital

If your business is VAT registered with a taxable turnover above the VAT threshold of £85K, from the 1st of April 2019 you must:

  1. Keep your VAT records on one digital system. 
  2. Stop using the HMRC online portal to submit your VAT returns.  
  3. Submit your VAT returns to HMRC through GovTalk using Making Tax Digital (MTD) 'functional compatible software'. 

Functional compatible software will communicate with GovTalk via an Application Programming Interface (API) platform.

A soft-landing period of 12 months means you can still use spreadsheets and manual processes to calculate the figures if you want to.

From April 2020, these rules will extend to:

  1. All VAT registered businesses.
  2. Income Tax and Corporate Tax.

Your processes should be fully digitised by 2020 as HMRC want to eliminate the potential for manual errors.  

How Microsoft Dynamics Helps You Make Tax Digital

Supported Microsoft Dynamics (MD) products are compatible with GovTalk software. Compatibility means MD will submit your VAT returns to HMRC. Depending on the Microsoft Dynamics version you’re using note:   

  • Microsoft may release a cumulative update or service pack.
  • Some legacy versions may not enable you to digitise all your processes by 2020. Don’t assume an update means 100% compliance.

If you’re using an unsupported, legacy version of Microsoft Dynamics, you have two options:

  1. HMRC is making an API available. The API lets you set up a workflow to submit your VAT returns. 
  2. Upgrade your Dynamics system.

Need our Help CHECKING IF YOUR VERSION OF MICROSOFT DYNAMICS IS 100% COMPATIBLE WITH MAKING TAX DIGITAL?

Our accredited consultants have decades of experience and live and breathe Microsoft Dynamics.  We can help you check your version of MD is fully compliant with Making Tax Digital.

Contact us today or reach out to Kantilal via LinkedIn.

Further Reading on Making Tax Digital

Here are useful resources from Microsoft and GOV.UK

Microsoft

VAT 2019 digital regulations for Microsoft Dynamics GP

GOV.UK

Making Tax Digital for VAT: legislation overview – published 13 September 2017

Overview of Making Tax Digital – updated 15 March 2019

Help and support for Making Tax Digital – check out webinars and videos

VAT Notice 700/22: Making Tax Digital for VAT – updated 5 March 2019  

Written by Kantilal Mistry