United Kingdom: Making Tax Digital - VAT return report creation for companies reporting as VAT group within the same system database on Dynamics AX 2012 R3

Applies to: Dynamics 365 for Finance and Operations

Introduction


On July 13,2017, the Financial Secretary to the Treasury and Paymaster General in theUnited Kingdom announced that Making Tax Digital (MTD) for value-added tax(VAT) takes effect on April 1, 2019.

Dynamics AX2012 R3 supports MTD for VAT of the United Kingdom. To support the MTD for VATrequirements on Dynamics AX 2012 R3 the hotfixes were released: # 4488588, # 4515253,# 4505299, # 4527009,# 4523295.

Currentupdate provides possibility to collect a common summarized VAT return basing ontax transactions posted in several Legal entities in AX 2012 R3. It is assumedthat all the tax transactions for VAT return are in the same system using thesame data base and it is supposed that tax transactions include all theinformation necessary for VAT return of the United Kingdom and preliminary VAT100 report is correctly generated as for the VAT return in each legal entityinvolved into the summarized VAT return.

To usecorrectly the update the following steps must be done in each legal entityinvolved into the summarized VAT return:

  1. Tax transactions are posted in eachsubsidiary legal entity according to the rules and principles of the UnitedKingdom.
  2. VAT settlement (“Settle and post”procedure) is done in each subsidiary legal entity.
  3. “VAT 100” report is correctlygenerated for preview in each subsidiary legal entity.

To reportto HMRC a VAT return of the VAT group, one legal entity must be setup forinteroperation with MTD APIs. Learn more how to setup an interoperation withVAT MTD in the KB # 4488588.

Thisarticle describes how to additionally setup and extend usage of the MTD for VATfeature for a “VAT group” scenario with the assumptions noticed above.


Overview


To prepareyour Dynamics AX 2012 R3 to report VAT return for a VAT group, make sure thatyour business processes and the system setup are in-line with the following terms:

  1. Tax information from all the subsidiariesis registered in the same system – AX 2012 R3.
  2. All the tax transactions arecorrectly reflected in the system in accordance with the rules and principlesof the United Kingdom.
  3. Settlement periods for all the legalentities involved to the VAT group are defined identically and in fullaccordance with the period intervals defined in HMRC online account.
  4. VAT settlement (Sales tax paymentprocedure) is done in each subsidiary legal entity.
  5. “VAT 100” report is correctlygenerated for preview in each subsidiary legal entity.
  6. One legal entity is setup forinteroperation with HMRC according to the documentation (KB # 4488588) and usercan request VAT obligations from this legal entity for the VAT group.

Thisarticle provides information:

  1. How to setup additionallyWeb applications form to collect data from several legal entities for VAT return reporting of the VAT group.
  2. How to use VAT returnssubmission form to collect information for VAT return reporting fromseveral legal entities.

How to setup additionally Web applications form tocollect data from several legal entities for VAT return reporting of the VATgroup

To prepare yourAX 2012 R3 to collect data from several legal entities for VAT return reportingof the VAT group:

  1. Open General ledger > Setup> External services > Web applications form.
  2. Select the web application you are going to usefor interoperation with HMRC for VAT reporting of VAT group and mark “VATgroup” check box:
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3. Go to “VAT group” fast taband define Companies and related Settlement periods, taxtransaction in which must be included into the VAT returns of the VAT group.


Importantnote: Only one webapplication marked as “VAT group” can be marked “Active”.

How to use VAT returns submission form to collect information forVAT return reporting from several legal entities

Tointeroperate with HMRC the VAT returns submission form is used. Learmore how to use this form in the KB # 4488588. Work withthis form as usually for generation and submission to HMRC of VAT return forthe VAT group. On retrieving of VAT obligations (via Retrieve VATobligations button on the Action pane), mark “VAT group” check box:

image.png

When VATobligations are retrieved, and you generate VAT return (via Generate VAT returnbutton on the Action pane), system will collect tax transactions for VAT returnfrom legal entities and VAT settlement periods according to the setup in Webapplications form for the active web application marked “VAT group”.



Hotfix information


How to obtain the Microsoft Dynamics AX updates files

This update is available for manual download and installation from the Microsoft Download Center.  
 
Prerequisites

You must have one of the following products installed to apply this hotfix:

  • Microsoft Dynamics AX 2012 R3
Restart requirement
You must restart the Application Object Server (AOS) service after you apply the hotfix.

A supported hotfix is available from Microsoft. If you are encountering an issue downloading, installing this hotfix, or have other technical support questions, contact your partner or, if enrolled in a support plan directly with Microsoft, you can contact technical support for Microsoft Dynamics and create a new support request. To do this, visit the following Microsoft website:
 

https://mbs.microsoft.com/support/newstart.aspx

You can also contact technical support for Microsoft Dynamics by phone using these links for country specific phone numbers. To do this, visit one of the following Microsoft websites:
 
Partners
 
 
Customers
 
 
In special cases, charges that are ordinarily incurred for support calls may be canceled if a Technical Support Professional for Microsoft Dynamics and related products determines that a specific update will resolve your problem. The usual support costs will apply to any additional support questions and issues that do not qualify for the specific update in question.