Making Tax Digital and the impact on VAT & RTI submissions

11th Monday, 2017  |  Uncategorized  |   no comments

Making Tax Digital is HMRC’s vision to digitise the UK tax system. Businesses will be required to use commercial software to maintain their records and to update HMRC quarterly, starting with VAT. From April 2019, all VAT-registered businesses with turnover above the VAT threshold will be required to maintain digital records and will need to send their VAT information to HMRC using third party commercial software. HMRC will not be accepting submissions made via their website. Moving on, from April 2020, Corporation Tax will also fall into the Digital Tax requirements. Digital Tax will eventually encompass Individual Taxation as well as Business Taxation.

By March 2018, the functionality provided by the Government Gateway will be migrated to a new HMRC Multi Digital Tax Platform (MDTP). The new platform will cater for online VAT submissions via what HMRC refers to as a ‘transaction engine’, which will have a different URL compared to the current Government Gateway. Customers will have to migrate to the new transaction engine by 13 February 2018, after which the current Government Gateway service will end. This, of course will also impact on Payroll RTI submissions.

As a result of the aforementioned changes, all major accounting and payroll software providers such as Sage and Pegasus are making the necessary amendments to their software offerings. Pegasus is uplifting Online Filing Manager to version 4.00, which will allow users to connect and make their submissions using the new transaction engine. Online Filing Manager (4.00) is now available as part of Opera 3 (2.43) and Opera II (7.63). However, for Opera II users, while Online Filing Manager (4.00) will enable them to perform their payroll-related submissions until March 2019. It will not, however, support the new API for Making Tax Digital VAT submissions to HMRC, which will be mandatory from April 2019.

For more information, please do not hesitate to call us on 0844 4434766 or email

If you have any queries, or would like to arrange for software upgrade, please call us on 0844 4434766