HMRC has transformed the way that tax administration is performed.
This will require potentially significant changes to your accounts department procedures, as well as your Microsoft Dynamics 365 instances.
What is Making Tax Digital?
Making Tax Digital is an important change intended to improve the accuracy of tax reporting. It is a move towards greater automation of tax return submission and aims to introduce more transparency around the taxes businesses owe.
The first major requirement has been for all VAT submissions to be made digitally. Since 1 April 2019, VAT-registered businesses with a turnover above a threshold of £85,000 will need to keep records digitally and use software to submit their VAT returns. And reporting on income and corporation tax was digitised from April 2020.
Businesses must now keep all their records digitally. Thankfully for organisations using Business Central, this requirement is already met
How can Business Central help?
Business Central provides a VAT Return report feature. This helps organisations to:
- Retrieve VAT obligations from HMRC
- Get reminded about VAT obligations that are approaching or already past due
- Submit VAT returns to HMRC
- View the VAT return
- View VAT payments with HMRC
- View VAT liabilities with HMRC
The Making Tax Digital VAT feature also allows organisations to report directly to HMRC. To make it easy to establish direct communications with HMRC, Business Central also provides the HMRC VAT Setup service connection. This contains most of the information needed to communicate with HMRC.
Business Central can also retrieve and store VAT obligations from HMRC, including information on the periods that an organisation must report on. This information is displayed within Business Central as VAT Return Periods, and automatically adds relevant dates to returns and reminds organisations as and when these become due.
The perfect time to adopt Business Central
The Making Tax Digital changes have proved a challenge to many organisations - notably international companies whose operations extend into the UK.
Thankfully, Dynamics 365 Business Central streamlines tax compliance, enhancing financial accuracy and simplifying reporting. This makes it an essential tool for businesses to navigate the complexities of digital tax systems effectively.
For more information on Business Central's capabilities around finance management and tax reporting, please get in touch:
