UK Making Tax Digital for VAT

Making Tax Digital (MTD) is an HMRC initiative designed to make sure the UK tax system is effective, efficient, and easier for taxpayers.

MTD began with Making Tax Digital for VAT on 1 April 2019. VAT-registered businesses with taxable turnover above the threshold ( £85k ) must keep digital records and submit VAT returns using compatible software.
The 2nd Phase will start on 1 April 2021: All businesses will have to put digital links in place to avoid VAT penalties.

Other components of Making Tax Digital, such as income tax and corporation tax, have been placed on hold until April 2020 at the earliest.

MTD Filling for VAT

- Mandatory from April 2019

- Filling frequency remains the same

- A variety of data delivery formats are available. 

- Records must be maintained digitally

What do Businesses do now?

- Keep records in a range of ways, including on paper.

- 99 % file their VAT returns online, mainly on a quarterly basis (either directly or through an accountant).

- Although many keep digital records, the vast majority calculate their VAT separately and submit their VAT returns using free HMRC products.

- Alternative arrangements for the digitally excluded.

What will Businesses do under MTD?

- Keep digital records using software or app (option to use excel if it links to MTDfB enabled software).

- Generate and send quarterly updates - same 9 boxes of information as VAT return – direct from digital records.

- The software can interact with agent software to allow them to check/Send updates.

- Alternative arrangements for the digitally excluded (follows current definition).

Which Data Will be Filled?

1- VAT on sales and other outputs due in the period 

2- VAT on acquisitions from other EC Member States due in the period.

3- Total Vat due (The Sum of boxes 1 and 2).

4- VAT reclaimed on purchases and other inputs in the period ( Including acquisitions from the EC).

5- Net VAT to be paid to HMRC (Difference between boxes 3 and 4).

6- Total value of sales and all other outputs excluding any VAT (Include your box 8 figure).

7- Total value of Purchases and all other inputs excluding any VAT (Include your box 9 figure).

8- Total value of supplies of goods to the other EC Member States and related costs, excluding VAT.

9- Total value of acquisitions of goods from the other EC Member States and related costs excluding any VAT.

How Can SNI Help You?

- A single partner for all countries:
At SNI, our primary objective is to be the global partner to help our customers remain compliant in this new digital world.

- End-to-end solution all three major steps in one single SAP add-on:
SNI covers all three 3 main layers for digital tax reporting and regulatory compliance.

SNI MTD Solution Architecture

Support for a long-term relationship

Main Features of SNI add-ons

  • - Fully integrated into SAP without an external interface or use of external software
  • - Globally registered «/SNI/» namespace for all objects
  • - SAP Version independent. Supports SAP ERP 4.7 and higher and also S/4HANA versions
  • - SAP release and upgrade independent; implemented without core modification
  • - ABAP is the programming language
  • - Installation is done simply by external transport file
  • - All developments under a package
  • - XML data stored in /SNI/ tables
  • - Compatibility – working with XI/PI or e-invoice integrators
  • - Standard SAP authorization used
  • - User-friendly screens
  • - Own customized tables
  • - Own transaction codes and menus
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