e-Tax Compliance

EDICOM MTD solution for VAT: Bridging software for Making Tax Digital

27.03.2019
UK Making Tax Digital

We are pleased to announce that HMRC has included EDICOM’s MTD electronic solution in their approved supplier list as a bridging and digital VAT record keeping software. This means EDICOM can supply companies with compliant services to both keep records digitally and send them to HM Revenue and Customs (HMRC).

Making Tax Digital is an important step forward in the digitalisation and modernisation of UK’s tax system. The Government announced in March 2019 that they would focus on supporting businesses with the transition and will therefore not be including new taxes in MTD in 2020.

Businesses can join the Income Tax pilot voluntarily. Businesses and landlords who join MTD for Income Tax will need to send quarterly summaries of their income and expenses to HMRC using MTD-compatible software. In response they will receive an estimated tax calculation based on the information provided to help them budget their tax.

How does our MTD software work?

  1. Automatic data capture: Our VAT Compliance solution integrates with your ERP or accounting system to capture invoice data.
  2. Excel Spreadsheet: Option to link your Excel report to our Excel spreadsheet and upload it through our platform to the HMRC
  3. JSON conversion: The solution builds the JSON-structured data in accordance with the regulations.
  4. HMRC connectivity: Our software has the approved API communications protocol to send the files to the tax authority.
  5. Acknowledgment reception and integration: You may request the following information from the HMRC – VAT obligation, if the report has been received, and retrieve VAT liabilities/payments – and integrate it into your ERP System.

MTD timetable

  • From 1 April 2019 all VAT-registered businesses with a taxable turnover above the VAT threshold are required to keep digital records and send VAT returns digitally to the HMRC using MTD-compatible software (except those that have been deferred).
  • For a small minority of VAT-registered businesses with more complex requirements, the HMRC established a 6-month deferral to ensure sufficient time for testing during the pilot. These businesses will be mandated to keep digital VAT records and send returns using MTD-compatible software from 1 October 2019. The deferral applies to a minority of businesses that fall into one of the following categories: trusts, ‘not for profit’ organisations that are not set up as a company, VAT divisions, VAT groups, those public sector entities required to provide additional information on their VAT return (such as government departments and NHS Trusts), local authorities, public corporations, traders based overseas, those required to make payment on account and annual accounting scheme users.
  • If a company has a taxable turnover below the VAT threshold, it can still sign up for MTD voluntarily.

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

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