As the ‘digital link’ phase of Making Tax Digital starts to take shape, you may still be unsure over what type of solution is best for your organisation in the long-term.

Whereas during the soft-landing period, the HMRC permitted the use of manual copy/cut and pasting for the transfer and exchange of VAT return data as part of your submission, from the 1st of April 2021 this has no longer been allowed if you are to be Making Tax Digital compliant.

Instead, you now need to have a ‘digital journey’ for your VAT return data, one that in your case is likely to start from your Unit4 ERP (Agresso) system and end with a submission to the HMRC via their dedicated API. Any transferring or exchanging of your VAT return data between different applications during this journey will have to be carried out via a digital link.

What are my options?

At a high-level, you have two options when it comes to choosing a solution to help your organisation ensure compliancy with the new ‘digital link’ phase of Making Tax Digital:

  • Dedicated Making Tax Digital software: These solutions provide you with the full end-to-end Making Tax Digital experience, enabling you to directly connect and send your VAT return to the HMRC’s API from within your Unit4 ERP (Agresso) system. They also enable you to benefit from your digital record keeping
  • A Bridging spreadsheet: These enable you to store and send your VAT return data from within a spreadsheet.

Which option would be best for my organisation?

The HMRC recently compiled a report gauging the experience of organisations who have undergone the process of becoming Making Tax Digital compliant in order to help answer this question.

Overwhelmingly, the HMRC found that organisations who had opted for a bridging spreadsheet had found the transition more difficult. These organisations also commented how they were finding their spreadsheets were not meeting their expectations or providing them with any tangible benefits.

Indeed, one interviewee even commented to the HMRC how they believed the only reason their organisation had chose a bridging spreadsheet was because it was the ‘only one their account knew how to use’.

On the other hand, organisations who had opted for a dedicated Making Tax Digital solution were very positive about the experience, and noted a number of key benefits, specifically.

  • A reduction in input errors as a result of the fact that their VAT return data was automatically pulled into their solution for them.
  • More accurate returns as everything is fed into the solution daily. This made it easier to account for everything and ensure all VAT records were included in the return.
  • Miscalculation errors were reduced as their solution automatically calculated the figures for them.
  • Quicker and easier correction of errors because frequent input, automatic bank reconciliation and easy-to-use software meant they could manage finances daily and in real-time, making errors easier to spot and source.

Our solution

Our Unit4 ERP (Agresso) Making Tax Digital solution is HMRC-approved MTD software, and enables you to send your VAT return directly to the HMRC from within your Unit4 ERP (Agresso) system, with no need for spreadsheets.

It also comes with a number of key benefits not found in other solutions, notably compatibility with various milestone versions and complex VAT-set ups to name a couple.

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