Making Tax Digital

What is it all about?

Making Tax Digital is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs.

HMRC’s ambition is to become one of the most digitally advanced tax administrations in the world. Making Tax Digital is making fundamental changes to the way the tax system works – transforming tax administration so that it is:

  • more effective
  • more efficient
  • easier for taxpayers to get their tax right

Making Tax Digital for VAT

HMRC are starting with the introduction of Making Tax Digital for VAT, which means businesses need to change the way they submit their VAT Returns.

From April 2019, most VAT registered businesses with a taxable turnover above £85,000 must keep their VAT records digitally and use Making Tax Digital (MTD) compatible software to submit their VAT Returns. Read more here about HMRC’s Making Tax Digital plans.

Does it affect me?

If your organisation is a VAT-registered business with a taxable turnover above the VAT threshold (i.e a turnover above £85,000) then you will be required to use the Making Tax Digital service to keep records digitally and use software to submit your VAT returns from 1st April, 2019 onwards.

The exception to this is for a small minority of HMRC customers who 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 (government departments, NHS Trust), local authorities, public corporations, traders based overseas, those required to make payment on account and annual accounting scheme users. The deferral will apply to around 3.5% of mandated customers. For these customers, HMRC will be delaying mandation until 1 October 2019 to ensure there is sufficient time for testing the service with them in the pilot before they are mandated to join.

We can help

 With the deadline approaching, K3 can help.

We have created a Making Tax Digital for VAT app which allows you to submit your VAT return digitally and verify and store your submission history, so making you compliant.

K3|digital VAT (UK) is recognised by HMRC for UK Making Tax Digital and is listed on the HMRC’s list of software products that support Making Tax Digital, which means that the HMRC has been presented with a demo of our app and the features which support compliance are:

  • Visibility into your VAT obligations
  • Creating VAT returns based on VAT obligations
  • Submitting the VAT return to HMRC
  • Viewing your VAT liabilities and payment

Why choose the K3|digital VAT (UK) App

Whilst there are other filing systems available, K3|digital VAT (UK) has been developed to support ERP products including Dynamics AX, Dynamics NAV and K3 Sigma and has many more advantages.

K3|Digital VAT (UK)Other filing systems
All your details in one place, including filing history and payments madeYou have to remember when you have to submit
Quick and easy login and validationYou have to extract all the data manually which is time consuming
Pulls the data directly from your ERP system and allows you to cross check, saving up to 1-2 days per monthYou have to work out the 9 box numbers yourself
Sends and confirms your response to HMRCYou have to input them into the submission frame manually
Saves the submission history and ties it back to the original transactionsYou need to get a response number or email and note it down and hope you don’t lose it
K3 can roll out HMRC changes to all customers quicklyThere is no tie-back to the original transactions
K3|digital VAT is a scalable solution which can grow as needs changeThe activity is limited to the scope of Making Tax Digital as it is now. May be out of date in a year

How does it work?

Based on K3|imagine, K3|digital VAT (UK) connects your ERP to a cloud-based app which then:

  • Authenticates with HMRC to confirm your identity
  • Tells you the status of your VAT submissions and when the next is due
  • Receives transactions from your ERP
  • Summarises and displays your 9-box report
  • Sends the 9-box report to HMRC via HMRC API Call
  • Logs the HMRC submission response against transactions
  • Provides response back to transactions in ERP via API call from your ERP

K3|digital VAT (UK) is recognised by HMRC for UK Making Tax Digital. HMRC’s list of software products that support Making Tax Digital

What’s the cost?

The K3’s Making Tax Digital App is available at £504 per year, paid up front for a 12 month subscription, (£42 per month). This is based on each individual VAT number, irrespective of filing frequency, or ERP system.

What other charges are there?

K3 will undertake an assessment of your system to ensure that it has not previously been customised for Tax and confirm suitability of the application.
We will then install and test the K3|digital VAT (UK) app. As part of the deployment process we will provide some training and process understanding.

Any further VAT consulting or configuration that is required will be provided on a T&M basis and is outside of our estimate provided to assess and install the K3|digital VAT (UK) app.

Should you wish, we will then check your VAT configuration and provide you with the necessary training to get you up and running. This time will vary based on your needs. Alternatively, you can self-configure and test based on the user guides and resources we will provide if you feel this is the best option for you.

What systems will it work with?

K3|digital VAT (UK) has been developed to support products including

  • Microsoft Dynamics NAV ( various versions)
  • Microsoft Dynamics AX2012
  • Microsoft Dynamics AX2009
  • Sigma

If you’re on later versions of Microsoft Dynamics we can also get you up and running, helping you to configure the standard Microsoft products for Making Tax Digital.

Talk To Someone About K3|digital VAT (UK)

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