SA MTD VAT Reporting overview

System Administrator > Administration > MTD VAT Reporting

Functional acronym: SAAV

Use this function to review and submit Value Added Tax records in compliance with the Making Tax Digital (MTD) initiative. This initiative is regulated by the United Kingdom (UK) government department, Her Majesty’s Revenue and Customs (HMRC).

Her Majesty’s Revenue and Customs (HMRC) is the UK government department responsible for collecting Value Added Tax (VAT). On April 1, 2019, HMRC implemented the MTD initiative. Under this initiative, UK VAT-registered businesses whose taxable turnover exceeds the VAT registration threshold must keep their records digitally. They must submit their returns digitally to HRMC. Businesses with a taxable turnover under the threshold can voluntarily submit their records digitally.

HMRC requires that businesses submit a VAT return monthly or quarterly. Businesses that meet MTD standards must maintain digital records in functional compatible software. Such software must be a software, spreadsheets, or a combination thereof, that can connect to HMRC through an Application Programming Interface (API). VAT returns must be submitted to HMRC through the software communicating digitally through the HMRC API platform. CloudSuite Distribution and on-premises Distribution SX.e support this VAT digital tax initiative.
Note: If you use a third-party tax solution, such as Avalara's AvaTax or Sovos Global Tax Determination, VAT HMRC digital reporting is the responsibility of the third-party.

Operators must have the correct security in SA Operator Setup-Function Security to access the SA MTD VAT Reporting function. We recommend that you restrict access to this function to only those operators that work directly with VAT reporting.

This function has two uses:
  • Part of setup process

    As part of setup process, you must use this function to initiate the authorization process. Clicking the Authorization button connects you to a specific HMRC web page. In the HMRC web page titled, "Authority to interact with HMRC on your behalf," you grant authority for the Distribution SX.e application to connect to the HMRC system and ensure a valid authorization exists.

    You are not required to go through the authorization process again until the current authorization expires or is revoked. An access token is created and stored in the HMRC system. The access token is used when you perform VAT digital reporting. The token is good for 4 hours. A refresh token is also created. The refresh token is used to obtain a new access token after the current one expires. After 18 months, if access has not been revoked, the access token can no longer be refreshed. A new authorization must be obtained.

    See the online help for instructions for setting up VAT HMRC digital reporting.

  • VAT digital tax record keeping and submittal

    As part of VAT digital tax data record keeping, you can review and submit VAT records from this function. You cannot make changes to the data in this function. This function communicates with the HMRC through HMRC's API to send and receive information about past, current, and future VAT reporting periods. For the current VAT period, you can collect the VAT data, review what must be reported, and then digitally file the VAT information directly to HMRC. Perform the search from the main page, and perform the review and submittal from one of the four tabs: Return, Transactions, Payments, Liability.

Main

In the Search pane, specify a Year. Typically, this would be the current year. Click Search to show applicable records in the grid.
Period
The value for the period is defined by HMRC and autopopulated in the grid. If you submit quarterly, up to four records are shown. If you submit monthly, up to 12 records are shown.
Status
The status is Fulfilled or Open. Fulfilled shows that you have submitted VAT data for this period. Open shows you have not submitted VAT data for this period.
Start Date
The start date for this period.
End Date
The end date for this period
Due Date
The date your VAT data is due to be sent to HMRC.
Received Date
The date your VAT data was sent and received by HMRC.

For each record displayed in the grid, you can drill down to view period details and to submit VAT data for the period due. If you drill down on a Fulfilled record, an API call is made to HMRC, and the retrieved data is shown in the tabs. If you drill down on an Open record, only the data currently in the Distribution SX.e system database is shown in the Return tab. In Open status, the data displayed changes as VAT transactions occur in the system.

Return

In the Return tab, view the Return Details for the period. The data is displayed in fields matching the 1-9 boxes on the standard VAT return. If you are reviewing the VAT data due for this period, theSubmit button is available. The button is not available before the End Date. Click this button to send the data to HMRC. When HMRC receives and accepts this data, the totals are sent back to Distribution SX.e. If no data is found for that period, an error is displayed. If you try to submit again, a message is displayed indicating the data has already been sent. To view the data that is used to build the return totals, access the Transaction tab.

Transactions

In the Transactions tab, the VAT Reporting Period, Start Date, and End Date autopopulate the fields. You can also filter based on these Data Sourcevalues: All, Accounts Receivable, Accounts Payable, and Vendor Rebates. You can filter based on the Country and Tax Group value. Optionally, you can Export To Excel, if further research is required. The grid columns show the database table fields.

Payments

The Payments tab shows any payments that are made to HMRC for the period. The data displayed in this tab is defined by HMRC and autopopulated in the grid. The data received is displayed for the return's Payment Date and Payment Amount. An error message is displayed if the date range is invalid or no data is found.

Liability

The Liability tab shows any liabilities still owed to HMRC for the period. The data displayed in this tab is defined by HMRC and autopopulated in the grid. The data received is displayed for the return's Due Date, Outstanding Liability, Original Amount, Type, Tax Period Start, and Tax Period End. Type refers to the surcharge or penalty assigned by HMRC; for example, VAT Return Debit Charge. An error message is displayed if the date range is invalid or no data is found.