Director of Operations & Systems Education
Like many businesses at this point in the year, our sights are firmly set on 2021 and preparing for the opportunities and challenges that a new year will bring.
We kicked this theme off in last month’s View from LEVEL8 with a focus on software upgrades but now, in our last insight article of the year, we’re turning our attention to a subject, initiative and looming deadline that has dominated UK accounting chat for a while – yep, you’ve got it, it’s Making Tax Digital (MTD from here on in!).
MTD has become an even longer-running saga thanks to HMRC’s (very sensible, in our opinion) decision to delay the Phase 2 deadline from 1st April 2020 to the same date in 2021 due to the Covid-19 pandemic.
Now though, after a year during which businesses have had to handle a multitude of unforeseen financial and operational challenges, many will now be refocusing on MTD, realising the clock has rolled onwards and it has quickly become a pressing issue once again.
The MTD regulations require more than one million UK VAT registered businesses to record and submit their VAT returns digitally with no interruptions, this includes manual transfers or adjustments.
And now with the Phase 2 deadline nearly here, the MTD regulations will bring with them, for the first time, a new penalty regime targeting those businesses that fail to keep digital records or maintain a complete digital journey of the financial transactions that tell the story behind their operations.
Of course, with the introduction of MTD being long anticipated, well publicised and having a significant ramp up period – even before being delayed – it’s something we have been able to plan for. The core of this work has been focused on ensuring our clients are prepared for MTD and have the best tools at their disposal for dealing with the new regime.
Our partnership with Avalara has been key to these efforts. Having originally partnered with the tax experts and their ComplianceCloud platform to deliver compliance solutions for clients, 2020 has seen us working with them to begin rolling out their Unit4 Financials integrated solutions for MTD.
Avalara initially joined forces with Unit4 to offer Unit4 Financials customers more powerful functionality for complex VAT requirements. The new Structured Output Extension that resulted offers these businesses a more robust solution for MTD filing & compliance, using automated data extraction and consolidation from Unit4 Financials software.
And it’s not just MTD where there’s benefits to be accessed through use of the extension. The new functionality introduced also opens the door for businesses to handle more complex tax functionality across European borders. These features include:
- Statutory filings in over 50 countries for VAT returns, Intrastat, ESL, VAT books, VAT SAF-T, local listings, reverse charge listings and sales and purchase ledgers.
- Powerful data checking and validation – automatically checks every invoice document and identifies errors and anomalies.
- A range of reconciliations – including GL, Intrastat and Intra-community reconciliations.
For more information you can check out the video below on the Structured Output Extension and to find out everything you need to know about the MTD Phase 2 deadline we’ve made Avalara’s essential guide available here.
The team at LEVEL8 are always happy to discuss what this all means for your business, your Unit4 Financials system and how we can support you to become MTD-ready.
There’s still time to prepare so get in touch for an initial chat.