The introduction of Making Tax Digital, or MTD, can be confusing at times!
It is often difficult to find the information you need surrounding the topic. To make things easier we have put together this short guide explaining MTD with a list of options for Sage X3 users.
If you need more information, please do not hesitate to contact us.
MTD started on the 1st April 2019. It is a UK government initiative that is designed to be more efficient, more effective and easier for taxpayers (individuals and businesses) to get their tax right. The system aims to eradicate the errors made when inputting data manually.
At present (2019), the initiative only requires UK VAT registered businesses to submit their VAT returns digitally to HMRC. At some point during the next few years, income tax and corporation tax will also be required to be submitted digitally. The government will announce this at a later date.
What MTD Means for You
The final deadline to submit your VAT returns digitally is 1st October 2019 although this may have been earlier depending on your business’s financial year. Please note that you can submit at any time before your deadline. Make sure you understand your financial year so that you understand when your VAT return is due.
However, there are some exceptions. About 3.5% of VAT registered companies do not have to submit until after 1st October 2019. They are categorised in the ‘Deferred Group’. These are mostly not-for-profit organisations or NHS businesses. You will have received a letter in January 2019 informing you if you are categorised in the ‘Deferred Group’ and this will allow you an extra 6 months to submit.
There is also a ‘Soft Landing Period’ which lasts 12 months from 1st April 2019 which put simply is extra time for more complex businesses to digitise their financial processes.
Quarterly submissions are the most common so for example:
- The first submission for a business that submits quarterly would be August
- VAT Quarter = April (after MTD started) – June
- 1 month and 7 days to process the data for these 3 months = August
Sage X3 Customer Options
|PU9, V11 and V12||PU8 or older||All Sage X3 users|
|A software patch||An additional Sage module||A third-party solution|
- PU9, V11 and V12 users can use a patch for Sage X3 in order to be MTD compatible
- PU8 users and below can purchase an additional Sage module for Sage X3
- All customers can use a third-party solution, such as VitalTax, which may incur an additional fee and often uses extensions
PU9, Version 11 and Version 12
Via the latest patch you will be able to submit your taxes directly from your Sage X3 solution to HMRC. The patch update will require some professional service time so remember to allow for this.
PU8 or Below
Sage have released a Making Tax Digital module that can be implemented within Sage X3 PU8 or older allowing you to pull data from Sage X3 and into HMRC. The module will require a separate purchase and professional services time to implement.
A range of third-party add-ons are available, however, be aware that not all are compatible with Sage X3. At Mysoft we have been successful using VitalTax that uses Microsoft Excel. This requires minimal download time and incurs a small monthly fee.
“You don’t need to have a particular data format or spreadsheet template to use VitalTax, as it can be used with any user-defined Excel spreadsheet. You can also export VAT return from your current accounting solution and use VitalTax to submit it via MTD gateway.” Vitaliy, Director, VitalTax
Please note: All of the above information is for compliance according to 2019 legislation. There will be further requirements for 2020 legislation which we will release information on in due course.
Please contact us for more information.