The deadline of April 2019 for the UK governments’ Making Tax Digital (MTD) initiative is fast approaching. Unfortunately, there’s lots of mixed information out there and a view that government has not done a good enough job of communicating what it is, or preparing businesses for what is coming. However, it looks like the deadline will remain, which means businesses must ensure they are properly prepared.
What is MTD?
Essentially, MTD is being implemented to help businesses get their tax right and be enabled to manage their tax affairs with more efficiency and visibility. It’s the first step to modernise an outdated system and bring it into the digital era. The ambitions of the HMRC is to become the most digitally advanced tax administration in the world. A lofty aim no less, but one you can see has the potential to add huge benefits if implemented correctly. It will mean no waiting around for tax calculations as you’ll be able to see what’s owed in real-time and less inaccuracies.
April 2019 is the mandated deadline for businesses to be using MTD for VAT submissions only. However, this is the first phase and new deadlines will arrive in the coming months and years for digitising other tax collection processes. It’s therefore important to get on board with MTD in good time and take the stress out of ensuring your compliance.
For MTD to work an Application Plug-in (API) needs to exist between the software you use and the systems at the HMRC. Without this the data exchange necessary cannot take place.
What does this mean for Dynamics NAV users?
Firstly, don’t be alarmed that Microsoft Dynamics NAV isn’t currently one of the ‘approved’ software providers to MTD. Microsoft has underlined its commitment to achieving compliancy with MTD, although it appears there are technical imperfections to iron out.
In the meantime, here’s some recurring FAQs from Microsoft, which might help with your thinking on the matter.
What we do know…
While the ability to submit tax digitally exists in more recent versions of the software, organisations using older installs of Dynamics NAV are going to encounter issues. It’s important therefore to make a proper assessment of what steps will be best to take. Commercial and technical considerations will influence whether making an upgrade to a newer version or implementing a bespoke modification for tax submission will be more advantageous to achieve compliancy. We are already in-flight with this process for several of our customers.
A cautionary note
Ocean Dynamics is not an accountant or law firm, it is vital that you seek professional advice on the matter of MTD. We can however, help prepare your Dynamics NAV system for what’s ahead. If you’d like to know more or would like to talk further with one of our experts, then please get in touch.
Posted by Geoff Undrell on
4 October 2018 at 12:00 AM
And say hello to the newest generation of NAV....