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Making Tax Digital (MTD), is legislation that is coming into force from April 2019 for businesses with a turnover above the VAT threshold (currently £85,000). There are a few exceptions, which can be seen on HRMC’s website, but it will broadly apply to unincorporated businesses, companies, LLPs and charities.

The website has stated that: “Making Tax Digital is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs – meaning the end of the annual tax return for millions.”

From the 1st April 2019, affected businesses will need to ensure certain types of records must be kept, maintained and preserved in digital form. The regulations refer to this information as your ‘electronic account’.

You will also be required to keep additional records, such as invoices. These additional records don’t have to be kept digitally, but it may be easier to do so. For further information on the additional records that must be kept for VAT purposes, see VAT Notice 700/21: keeping VAT records.

Information businesses will need to submit for the purposes of MTD, include:

  • Business name, principle place of business, and VAT registration number – you will also need to include information regarding which VAT accounting schemes are used.
  • The VAT account that each VAT registered business must keep, by law – the VAT account is the link – the audit trail – between primary records and the VAT return
  • Information about suppliers and services made and received

This means that receipts, invoices etc. (basically any data and evidence relating to company spend) needs to be captured digitally and submitted to HMRC using compatible software.

The good news for our SAP Business One customers is that SAP and their Business One product are taking part in a pilot phase of testing for MTD, directly with HMRC. In doing so, SAP has been listed as an approved and suitable software vendor for MTD. The listing is proof that respective software vendors have tested their products in HMRC’s test environment and demonstrated a prototype of software to HMRC.

SAP intends to provide a patch or patches in order to add MTD functionality to SAP Business One. Please be aware, however, that SAP has said that it will: “deliver patches only for selected releases at its own discretion, based on the business impact and the complexity of the implementation.”

Further to this, from what SAP themselves said at our event on 18th September, it appears that they are currently only looking to include MTD functionality within v9.3 or higher.

Because of this, we are therefore recommending that any customers that have not already upgraded to SAP Business One v9.3, consider doing so well in advance of April 2019 to ensure they will be able to meet with the required legislation.

If you would like to talk to us about upgrading your current version of SAP Business One, please call 01905 758900, or email us via