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Making Tax Digital with Microsoft Dynamics NAV and Microsoft Dynamics 365 Business Central

Posted by Rowan Gill on April 6th 2019

The introduction of the new HMRC VAT submission systems “Making Tax Digital” (MTD) is now live! The latest changes are just the first steps in bringing in the new framework for VAT return submissions and affects companies with a turnover above the VAT threshold (currently £85,000) who may now be required to keep their records digitally (for VAT purposes only). Those companies affected will no longer be able to manually submit their VAT returns online using the current portal and will need to provide VAT return information, via an API directly, to HMRC servers.

If you are unsure whether your business will be affected by this new legislation you can find out by contacting HMRC.

Microsoft Dynamics NAV and Microsoft Dynamics 365 Business Central update for Making Tax Digital

In December, Microsoft announced that they have released the relevant cumulative updates (CU) to support the new MTD processes. These updates have been, and will only be, released for supported versions of Dynamics NAV and Business Central. This means that if you are running Microsoft Dynamics NAV 2013 R2 or below will not have access to the new functionality and will need to find alternative solutions.

What does MTD mean for your business?

In order to take advantage of the MTD functionality, the December 2018 CU needs to be applied to Microsoft Dynamics NAV and Microsoft Dynamics 365 Business Central business database. This will involve merging the updated objects in the CU into the customers database. There are two different ways this can be done…

  • A partial merge that just introduces the MTD functionality.
  • A complete merge of the latest cumulative update. Not only does this include the MTD functionality, but also updates the customers database with any additional hot fixes that Microsoft have released since the application went live.

There are also options available outside of NAV for those customers that do not want to invest in the latest CU to be merged, which are noted below.

What about customers using Microsoft Dynamics NAV 2013 R2 and below?

It is possible to utilise MTD in the following ways:

  • It is possible that your MTD needs can be fulfilled by your accountants.
  • There are Excel solutions available in the market place to support MTD requirements. These solutions submit the VAT return using the new systems and are easy to use. However, it is not certain at this point how long these solutions will be valid for use.
  • Ultimately, you can upgrade to the latest version of Business Central. This is obviously the most expensive option but is the most future proof in terms of software.

 

Take a look at some useful MTD resources to help you get started.

Making Tax Digital Readiness Checklist 

  Making Tax Digital Evo-soft Video

As a Microsoft Dynamics NAV and Business Central specialist, BCN can provide resources to get your business ready for MTD and assist you with your understanding of the processes within the application.