Making Tax Digital Changes and SAP Integration

Making Tax Digital An Introduction Presented by Julie Stuart

Agenda What is Making Tax Digital? Who is affected by MTD? What won t change? What are SAP doing about MTD? MTD and 9.3 PL08 What to do before the upgrade Summary Live Q and A

Overview of the Changes Exemptions: From 1 April 2019, unless exempt or deferred, businesses 1. Insolvency MTD is voluntary with a turnover above the VAT registration threshold will be 2. Religious Grounds (e.g. beliefs that prevent use of computers) required to: 3. It is not reasonably practicable (HRMC decide this on a case by case basis) 1. Keep records digitally in compatible software (for VAT purposes only) 2. Submit VAT returns to HMRC and provide HMRC with Charities, local authorities, Government departments and overseas businesses will not be exempt from MTD for VAT unless their taxable activities are below the VAT threshold information held in digital records (when requested) through MTD compatible software 3. Receive information from HMRC via the API platform 4. Record total adjustments in compatible software MTD is not compulsory for voluntary VAT registered businesses below VAT registration threshold (currently 85k)

Deferrals On 16 October, HMRC announced that the implementation date is deferred to 1 October 2019 for certain entities: Trusts Not for profit organisations that are not set up as companies Public sector entities that are required to provide additional information on their VAT return (eg Government departments and NHS trusts) Local authorities Public corporations VAT divisions and VAT groups Overseas traders Businesses that make payments on account Businesses using the annual accounting scheme Do not assume that your organisation falls into one of the above categories. Speak to your accountant and HMRC for verification if you feel that your company fulfils the requirement to enable deferment.

What wont Change The following should stay the same: Current 9 boxes VAT periods (monthly, quarterly, annuals and non-standard) Submission deadlines Payment deadlines

SAP and MTD Many of our customers are anticipating an upgrade to 9.3 PL08 to enable them to fulfil their digital submission requirements as they are already creating their VAT returns using the SAP VAT functionality. Signum understand that it is unlikely that an earlier version of SAP Business One will be able to fulfil the new digital electronic requirements of HMRC. The developers at SAP are aware that digital reporting requirements are becoming standard practice with many of you already uploading your Intrastat or EC Sales Reports electronically using the software.

New SAP Version - 9.3 PL08 9.3 PL08 will allow you to keep your source data in a format which will meet the new requirements and provides a new function to create VAT reports for submission. This replaces your current VAT reporting function with a BAS (Business Activity Statement) facility. This looks no different than your generated VAT report, but has greater functionality and has been developed with future HMRC requirements in mind. PL08 will also contain the functionality to electronically upload the required reports to HMRC and download any information from HMRC which is relevant to your account.

Before Upgrading Ensure that all your EU customers and suppliers have a valid VAT number and that the correct VAT code is applied to all their transactions. Check and complete this information if it is missing. This information is always preceded by the country and the system will check that the VAT code entered the correct length and formation.

Rest of the World Business Partners Rest of the World Business Partners For Rest of the World transactions, most customers will be using a zero rated code. In 9.3 PL08, there are specific VAT codes that will need to be applied to your Rest of the World business partners. It s a good idea to create a list of these now so that you can update the information on these accounts once you have upgraded.

Extended Tax Reporting Finally, Signum recommend that you switch on the Extended Tax reporting if you are not currently using this facility. Extended Tax reporting can be found in Administration -> System Initialisation -> Company Details -> Accounts. Tick the box to switch the function on. You should do this initially in your test company to find out what difference this will make to your VAT reporting.

Extended Tax Reporting cont Extended Tax reporting will give you the ability to better report and reconcile your VAT. It s best switched on at the beginning of a VAT reporting period so that all your transactions for a VAT period are captured. If you switch this on early, you should be able to ensure that your VAT is reconciled and up to date before you upgrade.

Uploading to HMRC You will be able to upload to HMRC directly from SAP, once you have been upgraded to 9.3 PL08. To do this, you will need to have a government gateway account to nominate a specific individual in your organization who will be responsible for uploading the data www.gov.uk/vat-registration www.gov.uk/guidance/making-tax-digital-for-vat

Uploading to HMRC The government gateway account will provide you with an access code each time you access the account which you will need to enter into the correct field in SAP. This will be required to upload your VAT submission. You will also be able to access information held by HMRC. You will be able to see past submissions, exchange messages with HMRC and view your account with them. There will be a facility for missed transactions where these need to be reported and included in your VAT submissions.

Conclusion We understand that Making Tax Digital represents a big change to how you currently submit your VAT returns and it is important to us that you feel supported throughout the process. Signum Solutions are happy to help with any question or training you may require in regards to the implementation of this new VAT function. However, we are not acting as VAT advisors for our customers. Please contact your accountant if you have any specific questions regarding your VAT. Thank you for your attention.

Additional resources will be available for you to download from your Signum Customer Forum. www.signum-solutions.co.uk/forum/

Questions Any Questions? E: julie.stuart@signum-solutions.co.uk E: Diane.Harvey@signum-solutions.co.uk E: steve.dolan@signum-solutions.co.uk E: support@signum-solutions.co.uk

Questions Thank You