Making Tax Digital

Making Tax Digital rules come into effect from your first VAT period starting on or after 1st April 2019 if your organisation is VAT registered with a taxable turnover above £85000. Even if you are exempt from making tax digital you may want to follow the making tax digital rules.

Are you ready for Making Tax Digital?

 HMRC requires that all VAT registered Businesses must keep and preserve certain records and accounts. Under making tax digital some of these records must be kept digitally within compatible software.

Certain software records all your VAT records and accounts information. By law there are some records that must be kept and preserved in their original form either for VAT or tax purposes, for example you must keep an Import VAT certificate (C79) in its original form. Invoices must be kept in their original form unless the document is scanned into compatible software and puts the information into its ledger. If the image is retained and contains all the detail required for VAT purposes, then the original invoice doesn’t need to be kept unless you need to retain it for other business purposes. You must also keep a digital record of the following: 

  • Your Business name
  • The address of your principal place of business
  • Your VAT registration number
  • Any VAT accounting schemes that you use

Functional Compatible Software

Functional compatible software is a programme, products or applications that must be able to:

  • Record and preserve digital records
  • Provide HMRC with information and returns from data held in those digital records by using an API platform.
  • Receive information from HMRC via the API platform

Microsoft Dynamics NAV 2018 and Microsoft Dynamics 365 Business Central have all the functionality included to accommodate HMRC requirements. For versions of NAV 2017, 2016 and 2015 there will be a cumulative update available which will give you the same functionality as NAV 2018 and 365 Business Central although this would require some extra work.

For more information on HMRC making Tax Digital visit  

https://www.gov.uk/government/publications/making-tax-digital/overview-of-making-tax-digital

For more information on Dynamics NAV and Dynamics 365 Business Central or updating your current version please get in touch. 

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