Making Tax Digital with SAP Business One.

Blog Post by Claire Kerr

Making Tax Digital (MTD) is a government initiative that aims to modernise the UK’s tax system and do away with the annual tax return. Instead, when the regulations come into force, businesses will use digital tax accounts to handle their tax and VAT in real time.

The first deadline for using the new system is April 2019, from which time many companies will be required to use a digital tax system for their VAT. In advance of this, Patch Level 8 (PL08) for SAP Business One is due to be released in December 2018. It will incorporate Making Tax Digital functionality so that businesses upgrading to the latest version of SAP Business One can meet the government deadlines, ensuring they are compliant with the MTD legislation.

Making Tax Digital with SAP Business One

Key requirements of making tax digital.

The main changes under MTD are:

  1. Information must be submitted to HMRC via its new application programme interface, using MTD-compatible systems.
  2. Certain records will need to be held digitally.
  3. Records will need to be digitally linked, with links from the final numbers to the source numbers.

Key dates for making tax digital.

April 2019: from this date, VAT-registered companies over the VAT threshold will have to use and maintain digital accounting records. They will also be required to submit their returns using MTD-compatible digital systems.

April 2020: VAT-registered businesses under the VAT threshold will be required to comply with MTD requirements.

From April 2020 (dates to be confirmed): income tax and corporation tax for all businesses will go digital under the MTD system.

MTD functionality in SAP Business One.

The new PL08 for SAP Business One will be a MTD-compatible system, reducing the burden on businesses with regard to tax and VAT reporting.

It will enable a user to:

  • See requests from HMRC, along with scheduled reminders for VAT declaration
    1. SAP Business One automatically links to HMRC to check for potential requests
    2. Manual requests can also be made at any time
  • Submit obligatory declarations
  • Check if there are any issues with previous submissions
  • See information on all VAT declarations and liabilities
  • Check if previous payments have been processed by HMRC
  • See an overview of all HMRC requests

MTD roadmap for SAP Business One.

In June this year, the SAP Business One team started piloting its new MTD API and testing it with HMRC. The test project is still ongoing and development has been continuing over the past few months. Shortly, a review programme will get underway in conjunction with a select group of SAP Business One customers. This beta programme will help SAP to garner feedback about the system so that it can make any refinements ahead of the full launch of PL08 to customers in December 2018.

Are you ready for making tax digital?

For rapid, easy compliance with Making Tax Digital, upgrade to PL08 for SAP Business One version 9.3. Call us on 020 8819 9071 or contact us for more detailed information on the patch or to schedule in your upgrade.

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