Over 1.4 million taxpayers are successfully using MTD for VAT. The UK will extend Making Tax Digital for VAT to all businesses below the VAT threshold from April 2022 to ensure every VAT-registered business takes the step to move to a new digital tax service. The current UK VAT threshold is £85,000 in turnover per annum.
The UK announced a roadmap for Making Tax Digital, alongside its long-term plans for tax administration reform. The UK published a document setting out its vision for a trusted, modern tax administration system. The tax system should work closer to real-time, improving its flexibility, effectiveness, and support for taxpayers.
Digital tools and services make it easier for companies to keep on top of their tax affairs and improve their productivity. Independent research shows that companies within MTD that fully integrate their accounting and tax software reports spend less time on tax. Micro-businesses who use software to manage their accounts have over 10% higher productivity, according to the Enterprise Research Centre.
Digital tools also reduce the scope for avoidable errors, which cost the Exchequer £8.5 billion in lost revenue in 2018-19 and make the tax administration system less burdensome for those taxpayers who want to do it right.
The UK announced a roadmap for HMRC’s Making Tax Digital program. Since April 2019, most VAT-registered taxpayers with a turnover above the VAT threshold have needed to operate Making Tax Digital for their VAT returns, keeping their records digitally and updating HMRC through secure software.
The UK will extend Making Tax Digital to other taxes. New regulations to businesses and landlords within Income Tax Self-Assessment will be launched in April 2023. This timetable allows companies, landlords, and agents time to plan. It gives software providers enough notice to bring new Making Tax Digital products to market, including software for businesses with the most straightforward tax affairs.
HMRC will expand its pilot service from April 2021 to allow companies and landlords to test the full end-to-end service before the requirement to join.
What do we offer?
We have various solutions to support our clients that are operational at multinationals and verified by HMRC and can be used for micro-businesses as well:
- Certified bridging software for MTD UK
- MacroExcel that meets the digital requirement
- SAP add-on for MTD UK
Brochure MTD UK add-on for VAT
Making Tax Digital Delivery Roadmap January 2020
What is an SAP add-on?
An SAP add-on enhances standard SAP itself.
Add-on components are extra functionalities that do not come with the main SAP product. Different organizations have different requirements. SAP has recognized that and facilitated that additional functionality can be added and that such functionality as a component can be integrated with Standard SAP.
An add-on is permitted by SAP – the code 'ABAP' is written and transported where SAP allows it. That means these add-on components sit above the core and access the same dictionary objects or repository objects and perform the required functionality. It contains custom authorization objects according to SAP standards.
SAP add-on solutions are, therefore, without an external interface or external software and can be implemented with minor or no SAP impact in any other area. An SAP add-on does not change the programming code of SAP. As a result, SAP upgrades do not lead to any problems, and maintenance is straightforward. Additional functionality is added to Standard SAP.
Written by Richard Cornelisse
Richard advises multinational businesses in improving the efficiency and effectiveness of their Indirect Tax Function and Tax Control Framework.
He started his career as a manager at Arthur Andersen and then became a partner in EY where I led the indirect tax performance team for Netherlands and Belgium. Currently, he is a senior managing director of KEY Group.
Richard has over 20 years’ experience advising clients on international VAT issues. He is specialized in the tax aspects of financial transformations, shared service center migration, and post-merger integration work. Richard is also somewhat of a mentor, giving back to the profession. If you are interested in conversation and discussion, please feel free to contact him.