e-Tax Compliance

Electronic VAT to be mandatory in UK via Making Tax Digital

16.09.2018
UK Making Tax Digital

UK business get ready for Making Tax Digital (MTD). Following the path of other countries like Spain, Hungary, and Lithuania, the UK is taking a step further towards business and fiscal digital transformation. The MTD project requires for business to keep digital tax records and send them to HMRC. This report must be filed to the HMRC every quarter. However, businesses can send their VAT reports more often as a way of having a better accounting control.

EDICOM’s MTD solution has been approved by the HMRC as a bridging and digital VAT record keeping software.

Who must follow from April 1st, 2019?

VAT-registered businesses with a taxable turnover above the VAT threshold of £85k are required to use the Making Tax Digital service to keep records digitally and send them to HM Revenue and Customs (HMRC) via API electronically and without any manual intervention.

Who must follow from October 1st, 2019?

If you’re in the deferral group, you must follow the rules for Making Tax Digital from your first VAT Return period starting on or after 1 October 2019. You’re in the deferral group if your business, is part of a VAT group or VAT Division, is based overseas, is a trust, is a not for profit organisation that is not set up as a company, submits annual returns, is a local authority, is a public corporation, makes payments on account or uses the VAT GIANT service.

What do I need to connect with the MTD model?

  • Automatic VAT book generation in structured format. The file must contain the nine fields currently reported to HMRC via other channels.
  • HMRC communication: Connection with the British tax office will be over the WebServices protocol via API.
  • VAT book electronic archiving.

EDICOM offers a service that makes it possible to transform necessary data into the format required by HMRC, securely connect to it, automatically file a VAT report, and finally archives the documents electronically with all the data needed. The EDICOM solution will receive and process notifications received from HMRC and archive them along with the reports.

What information has to be digitally archived?

Businesses must electronically archive the following information for six years:

  1. Company name
  2. Company address
  3. VAT registration number
  4. VAT accounting flowcharts
  5. VAT calculations
  6. Applied adjustments

The information to archive for product sales and purchases will be:

  1. Supply date
  2. Net value
  3. VAT
  4. VAT adjustments or corrections
  5. Total VAT
  6. Gross daily takings

Tax compliance digitization on a global scale

EDICOM has developed a comprehensive solution designed especially for multinationals. It is a B2B2G electronic communications platform with EDI, compliant e-Invoicing, and VAT compliance capacity at the global level.

The great challenge for global companies is to meet local tax compliance. When it is necessary to have multiple technology solutions, one for each country, efforts are doubled and actions become inefficient. This makes it hard to harness the potential of automation.

The EDICOM eVAT platform simplifies communication processes with tax authorities across multinational settings. It is the solution for companies that operate on different markets with centralized management systems that must be able to handle and send tax documents in accordance with the laws in force in each country.

In addition, EDICOM is a Trust Service Provider under the eIDAS Regulation, ensuring signing service security and reliability and, thanks to preservation of qualified electronic seal certification, also provides long-term electronic archiving capable of maintaining document integrity and providing documents with probative value.

See our solutions for Hungary, Portugal, Poland, and Spain.

Global VAT Compliance White Paper: how to file your e-VAT return

The Global VAT Compliance analysis expert document (available in English and Spanish) is a tool targeted at companies that operate across various countries or which intend to do so. It has information on the way the VAT indirect tax works, how it is regulated, and the implications involved for companies and tax authorities.

The Global VAT Compliance guide also sets out the e-VAT filing process in Latin America. Authorities in this part of the world have opted for a model that is different to the European one, where e-reporting is linked to electronic invoicing, compulsory for the vast majority of businesses.

Comply with Making Tax Digital by using a solution that transforms the data, securely connects to HMRC, automatically files the VAT report, and archives the documents electronically.

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