Making Tax Digital for business in the UK

Making Tax Digital is the UK law on electronic VAT statements which takes effect from 1 April 2019

Achieve Making Tax Digital compliance with our bridging software

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) from 1 April 2019.

The goal is to get a better grip on tax evasion and fraud and reduce the errors made on manually processed documents.

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

Which businesses are affected by Making Tax Digital?

This is the official MTD timetable. However, companies withs a taxable turnover below the VAT threshold can still sign up for MTD voluntarily.

  1. Start date: 1 April 2019

    All VAT-registered businesses with a taxable turnover above the VAT threshold  (£85,000) are required to keep digital records and send VAT returns digitally to HMRC using MTD-compatible software (except those that have been deferred).

    Digital records should include, for each supply, the time of supply (tax point), the value of the supply (net excluding VAT) and the rate of VAT charged. They should also include information about your business, including business name and principle business address, as well as your VAT registration number and details of any VAT accounting schemes you use.

     

  2. Start date: 1 October 2019

    For a small minority of VAT-registered businesses with more complex requirements, HMRC established an extension period of 6 months to ensure sufficient time for testing during the pilot.

    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.

What information should a Making Tax Digital file contain?

  • VAT due in the period on sales and other outputs

  • VAT due in the period on acquisitions from other EC Member States

  • Total VAT due (the sum of boxes 1 and 2)

  • VAT reclaimed in the period on purchases and other inputs (including acquisitions from the EC)

  • Net VAT to be paid to HRMC or reclaimed (difference between boxes 3 and 4)

  • Total value of sales and all other outputs excluding any VAT

  • Total value of purchases and all other inputs excluding any VAT

  • Total value of all supplies of goods and related costs, excluding any VAT, to other EC Member States

  • Total value of acquisitions of goods and related costs, excluding any VAT, from other EC Member States

How will communication with HMRC be implemented?

The connection with the UK tax authority will be through the web services protocol via API, preferably using JSON.

What information must be electronically archived?

Businesses must electronically archive the following information for six years:

  • Business name

  • Address of business

  • VAT number of business

  • Accounting schemes used

  • VAT calculations

  • Adjustments applied

For product purchase and sale, the information to file will be:

  • Date of supply

  • Net value

  • VAT amount

  • Adjustments or corrections made to VAT

  • Total VAT

  • Daily gross takings

Comply with the VAT declaration obligation today

We take care of the whole workflow under special security conditions.

Automatic integration

The solution is integrated with the company's ERP, implementing its mapping systems to automatically translate the information generated in the system to the electronic format required by each tax authority (XML, UBL, SAF-T, etc.).

Public Administration Hub

International communication platform to connect to HMRC or any other public body in Europe.

Invoice status control

The solution integrates status receipts directly in your ERP, affording real-time control on the status of invoices sent.

Electronic archiving

Electronic data archiving system applygin security mechanisms as Qualified Trust Service Provider (eIDAS certification). Invoices acquire probative value before third parties.

VAT Compliance White Paper

The Global VAT Compliance Expert Analysis (available in English and Spanish) is a resource designed for companies operating in several countries or planning to do so. Through it, you can find out how the indirect tax VAT works, how it is regulated and what its implications are both for companies and tax authorities.

Do you need to send VAT reports to different countries?

Hungary: Real Time Invoice Reporting since 1 July 2018

Spain: Immediate submission of VAT books since 1 July 2017

Poland: VAT returns using the JPK_VAT file

Portugal: e-Invoicing and e-Accounting