HMRC recognized bridging software and KGT SAP add-on
1 - Legal HMRC requirement
Since April 2019, local entities in the UK have been required to submit the nine boxes of their VAT return to HMRC through a different portal and must do so in an automated manner. This requirement has also been in effect for overseas traders and VAT groups since October 1, 2019. The key difference is that filing must occur automatically; manual entry of the consolidated figures from the VAT return boxes is no longer permitted. Instead, these numbers must be submitted via HMRC's new API platform, which also sends back a response from HMRC.
2 - HMRC recognized KGT bridging software
The SAP add-on for MTD UK is installed in your SAP environment, and it includes a cockpit where your employees can extract the data to prepare your VAT return. The SAP add-on is connected to KGT's HMRC-recognized bridging software that automatically, without any manual intervention, submits the numbers of your VAT return to HMRC.
All data remains in SAP and is transmitted to the tax authorities using encryption. The bridging software does not archive any data and functions solely as a passthrough, ensuring that no personal data is stored outside your SAP environment. Just so you know – only your employees are users and will have access to your SAP production environment; therefore, no third party will have access to your VAT data. In SAP, you will have a cockpit for extraction, submission, and receiving responses from HMRC.
3 - SAP add-on for MTD UK for VAT
KGT provides functionality under its KGT namespace to automatically extract, transform, and submit data from SAP to HMRC using HMRC-recognized bridging software. The SAP add-on is purchased outright.
The SAP add-on extracts all the relevant VAT return data from Standard SAP to calculate the nine boxes of the VAT return: The add-on converts VAT accounting data into the final numbers required for the nine boxes of the VAT return, formatted in a legally mandated JSON format. This add-on automatically generates the JSON file, allowing clients to submit their VAT return to HMRC and retrieve liability and payment reports.
The SAP add-on's cockpit enhances effective and efficient VAT management within SAP. This add-on fully supports all HMRC APIs, allowing users to manually adjust or input relevant VAT data directly (for example, a capital goods scheme adjustment). Additionally, the Cockpit logs these changes, providing an audit trail, and incorporates standard VAT controls to verify no VAT errors in the source data. All information is accessible in SAP and can be archived on a local server, enabling the client to provide data to HMRC swiftly when requested for tax audits. The underlying digital VAT accounting information is readily available in the cockpit and can be sent as a JSON file upon request from the tax authorities.
The SAP add-on allows for manual adjustments and maintains an audit trail of the VAT results, clearly showing initial results and any modifications leading to the final VAT outcome. The digital accounting data is archived in SAP and can also be stored on your local server.
Key functionalities include:
- Reconciliation of VAT results with the general ledger balance on VAT accounts.
- If applicable, reconcile VAT results with other reports, such as VIES and Intrastat.
- Integration with the client's existing calculation files, if requested.
- Custom enhancements based on the client's requirements, as the add-on can be tailored to meet specific demands.
