ECI are recognized by HMRC as supplying VAT compatible software. Look out for Horizon announcements and webinars.
The UK Government’s initiative to ‘make tax digital’ starts with VAT in April 2019. Businesses will have to keep digital records and send VAT returns to HMRC using MTD-compatible software for VAT accounting periods that start on or after 1 April 2019. This means VAT returns can no longer be submitted to HMRC via the Government Gateway.
There is a ‘soft-landing period’ between April 2019 and April 2020 to assist businesses with the transition (more info from HMRC). Most businesses above the current VAT threshold will be mandated to comply with Making Tax Digital for VAT.
What’s the plan for Horizon?
From April 2019, software that prepares a VAT return to send to HMRC must be MTD-compatible for businesses mandated to use MTD from this date. This means that the software can integrate with HMRC systems to send VAT returns to HMRC.
You will be able to submit your VAT returns to HMRC from Horizon by April 2019. As an ECI Cloud customer we will ensure your ECI software is upgraded as needed.
Customers on legacy Horizon Interbase systems will be able to submit VAT returns via a standalone ECI application during the soft-landing period.
From April 2020, data has to be exchanged digitally between all software used by a business for VAT. Provided you are on the latest version of Horizon, the information contained within the MTD VAT return will be generated by pulling information from your Horizon digital records. This information will be the 9 boxes required for the VAT return.
If you are on our legacy Horizon Interbase platform, you should make plans to migrate to the latest version of Horizon before the end of the soft-landing period. We can help you with that. Please contact us for more information.
Where are we up to?
We are well into the development and on track. We have developed an application that connects to HMRC, sends a VAT return and receives a response back for a successful submission. We are working with HMRC to ensure this solution is HMRC-approved.
What comes next?
The next stage is to incorporate this application into Horizon so that you can submit your VAT return from within Horizon itself. This will be done by April 2019, so you can be confident you will have an MTD-compliant method of submitting VAT returns to HMRC, calculating the VAT return totals as you do now. We recommend processing any business records that contribute to your VAT return calculation through the sales and purchase ledger.
HMRC state ‘cut and paste’ is an acceptable digital link for transferring data during the soft-landing period, provided the submission of those totals to HMRC is via MTD-compliant software. We recommend you read HMRC’s VAT notice 700/22 for more detail.
From April 2020 – at the end of the soft-landing period - data must be exchanged digitally between all software used by a business for VAT. The information contained with the MTD VAT return will be generated by pulling information from your Horizon digital records to calculate the 9 boxes required for the VAT return. We will start pilot schemes in 2019 for this. Please email EU Product Management eu-productmanagement@ecisolutions.com if you want to be part of the pilot scheme.
Don’t forget that you will need to be on our latest version of Horizon, which means upgrading from the legacy Horizon Interbase version before the end of the soft-landing period.
Some of my VAT return is calculated outside of Horizon. What should I do?
We recognize that some of our customers have business records or calculations outside of Horizon that contribute to their VAT return. To help you with this you will be able to calculate your VAT return as you do now and submit those totals to HMRC through the Horizon MTD VAT submission.
We’d love to hear from you about those parts of your VAT return that you don’t currently manage through Horizon. Email eu-productmanagement@ecisolutions.com and let us know what you do outside of Horizon and why. Thanks to those of you who have already provided feedback to us.
I still have questions
There’s lots of confusion around Making Tax Digital. If you’ve not yet read it, our FAQs will help shed some light on the government initiative and key terminology.
We have also held a webinar “Q & A” to answer additional questions. We’ll provide registration details nearer the time.
See Also
