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Have you applied the most recent patch (2019 February Hotfix) for Microsoft Dynamics GP so you are ready for the April 1st digital filing requirement for filing UK VAT taxes? The first phase of the new 'making tax digital' (MTD) requirements by Her Majesty's Revenue and Customs (HMRC) will go into effect on April 1, 2019, where VAT registered businesses (above a VAT threshold) must keep records digitally and submit the VAT Return electronically. I have provided some Q&A below to help you meet these new filing requirements:
**UPDATE - Dec 4, 2020**
The HMRC has made a recent change that all applications must support TLS 1.2 or higher (Transport Layer security). The latest TLS changes made in Dynamics GP 18.3 (2020) will satisfy this requirement. (Note that GP 2016 is a TLS 1.0 application and does not meet the TLS requirement set by the HMRC.) Therefore, if you need to submit electronic VAT files to the HMRC, you must upgrade to the latest version of Dynamics GP (18.3.1200 or 18.3.1173) to satisfy the TLS 1.2 requirement.
(TLS 1.2 is a new feature in GP 18.3. There wouldn't be enough time to get this added into GP 2016 before support ends in July 2021. So if upgrading is not an option at this time, you will need to find an alternate way to file, by asking the HMRC for an exception or finding a 3rd party solution to file for GP 2016. Please upgrade as soon as possible as there are other changes coming in 2021 (for GP 18.3) mandated by the HMRC that you will need in order to successfully file.)
1. Is the new MTD functionality available for all Microsoft Dynamics GP versions?
This new MTD functionality was first included in the 2019 February Hotfix for Microsoft Dynamics GP 2016 and Microsoft Dynamics GP 2018, and inclusive in all patch releases after that. (We recommend installing the latest patch update available.) This MTD functionality is not available for prior GP versions (ie. GP 2015 and prior). Below are the builds (and later) that include this new functionality: (Note that you must refer to the VAT build to determine which patch release you are have installed.)
• Microsoft Dynamics GP 2018:
February Hot fix: GP build: 18.00.0704, VAT build: 18.00.0704
April Hot fix: GP build: 18.00.0704, VAT build: 18.00.0705
• Microsoft Dynamics GP 2016
February Hot fix: GP build: 16.00.0741, VAT build: 16.00.0741
April Hot fix: GP build: 16.00.0741, VAT build: 16.00.0742
2. Is there a demo/documentation of the new MTD functionality?
Yes, review this document: Documentation on the new electronic filing feature.
3. How do I enable the new MTD functionality on my existing environment?
After installing the February 2019 update, go to the UK Digital VAT Setup window (Cards | Company | UK Electronic VAT Setup), and mark the checkbox to 'Use UK VAT Making Tax Digital'.
4. What should I be aware of before generating a VAT Return?
Before generating a VAT Return, be sure to:
• Specify your company's tax registration number in the Company Setup window (Tools | Setup | Company | Company)
• Verify that all your Debtors and Creditors have a COUNTRY CODE on their Debtor/Creditor Maintenance window. (Cards | Purchasing | Debtor or Cards | Sales | Creditor). The Debtor/Creditor will be skipped if the country code is missing. (Consider creating smartlists on the 'PM Vendor Master File' [PM00200] and/or 'RM Customer Master' [RM00101] tables for the front-end user to review.) The Country Code is now a required field in order to have the debtor/creditors tax transactions pull on to the VAT Return. (This is not required for VAT Daybook.)
• Make sure to print all the VAT detailed reports and compare the totals to the VAT Summary report to help identify any discrepancies.
5. On the VAT Return window, how do I submit it electronically?
When you enter your VAT Report ID and the YEAR you tab off the Year field, you will be launched to the HMRC_Log_in, where you will log into the HMRC software with your Government Gateway account and access code.** Save the return and your amount totals will be editable. Be sure to mark the 'Final Return' checkbox to enable the SUBMIT button. Once it is submitted you cannot edit the numbers, verify it is all correct prior to marking Final Return and submitting.
**If this does not launch for you automatically, your firewall may be blocking it and you will need to allow for it.**Example: www.gov.uk or https://api.service.hmrc.gov.uk
6. What do I do if the VAT summary return does not match the totals on the VAT detailed report?
Best practice is to print all the Detailed reports for your VAT Return as well and COMPARE to make sure totals between the reports match. If the two reports don't match then investigate what makes up the difference. (Remember that the amount fields on the VAT 100 Return ONLY are editable, so you can update the amounts at your own discretion before submitting the return. You may need to SAVE the return first and go back into it and the fields should be editable. But once you mark the FINAL RETURN checkbox, then the fields are locked down.)
7. Can I generate the VAT Return without launching to the HMRC site?
Yes. Simply unmark the checkbox noted in Step 3 above, and then when you enter the date range and generate the Return, the HMRC site will not launch.
8. Where can I find more information on installing the VAT Return module?
More information on installation/setup can be found in this blog article:
Microsoft Dynamics GP: Information about the VAT 100 Return
9. How do I set up the VAT Daybook report?
Review KB 313950 - Set up VAT Daybook reports in Microsoft Dynamics GP
10. If you receive an error message such as: Bad Request INVALID_Request PERIOD_KEY_INVALID or Bad Request VRN_INVALID, how do I fix?
• Make sure there are no spaces in the VAT Registration number.
• For a list of all MTD error codes review the HMRC site.
• The software will see different period key formats for different customers in MTD, depending on where their records are held in HMRC’s systems. The majority of customers will have alpha numeric period keys (e.g. 18A1) and will not have any open obligations for periods prior to joining MTD. However, customers with a fully numeric period key e.g. 0419 will be able to see open obligations for periods both before they have signed up to MTD and since joining MTD. You may experience problems where the ‘Get Obligations’ API end point is showing these numeric period keys as open, despite the VAT return having been submitted and the software having received a success message. HMRC is working to update these obligations at the earliest opportunity. Users should not attempt to make a further submission for a period already submitted, as this will not resolve the issue. HMRC is aware of some instances, where the obligation for a numeric period key is not viewable. HMRC is urgently reviewing requirements and providing changes as needed. When the period key is in an alphanumeric format, which is the case for the majority of customers, you should not encounter any problems.Note: There is not a way for Microsoft Dynamics GP to know what the period key is for a customer, you would need to contact your HMRC office for that info to see if you are affected.
11. When I tab off the YEAR field I get the message "No Obligations found for the year 2020" or "No Obligation periods found in year 2020" is given. What does this mean?
The HMRC has made a recent change that all applications must support TLS 1.2 or higher (Transport Layer security). The latest TLS changes made in Dynamics GP 18.3 (2020) will satisfy this requirement. (Note that GP 2016 is a TLS 1.0 application and does not meet the TLS requirement set by the HMRC.) Therefore, if you need to submit electronic VAT files to the HMRC, you must upgrade to the latest version of Dynamics GP (18.3.1200 or 18.3.1173) to satisfy the TLS 1..2 requirement.
• This message is generated from the HMRC site and means that there are currently no VAT periods or obligations periods found on the HMRC site for which your company must report VAT. Log onto the HMRC site directly (outside of Dynamics GP) and verify there are open obligation periods for your account.
• You may also receive this error if you are not logged in as user 'SA'. Try the same steps logged in as user 'SA'. Or install latest hotfix released April 2019.
• If you are using the VAT Daybook window the VAT Calendar setup needs to match the HMRC site for obligation periods exactly. If it does not, you will receive this error message.
• If the obligation deadline has passed, or you submitted by other means, example May 2019, you will receive this error, until there are new obligations for the next reporting period.
• It is also recommended to run a Fiddler trace of the submission, this may show you an error message and the problem of no obligations are found.Example we have seen some cases with a 502 error code, No connection could be made because the target machine actively refused it. Based on HMRC guidelines, we are using this for the redirect/response, when we are sending back to this machine for this company it is denying it.The customer needs to allow port 8080 on their proxy/firewall as the error indicates something is stopping the connection.You should also review any anti-virus software that could interfere with web protection to see if an exception needs to be made.• There have been a couple of cases where you get this error and if you run a Process Monitor log you will see a result of NAME NOT FOUND when calling the GPConnNet.dll, specifically on Microsoft Dynamics GP 2016. This DLL is typically located at this location:C:\Program Files (x86)\Common Files\Microsoft Shared\Dexterity\v2.0What has worked is if you copy the file from this location and paste it to the GP code folder, example location:C:\Program Files (x86)\Microsoft Dynamics\GP\ (or whatever you named your GP code folder)Now try to test the VAT return again.
• Verify that the VAT100ElectronicSubmission.dll file exists in the GP code folder. Default location is: C:\Program Files (x86)\Microsoft Dynamics\GP\ (or whatever you named your GP code folder)
• Verify you do not have a DNS alias name for your server. The response back from the HMRC site may not be received if you are using a DNS alias name for your server.
12. The HMRC does not accept negative numbers. I have negative numbers on my VAT summary report. Will my return be rejected?
The HMRC accepts negative numbers in all boxes except Box 5. Box 5 is automatically calculated by the gateway, so the number in box 5 is passed as an absolute value.
Dynamics GP also has validations coded where Box 9 cannot be greater than box 7 for purchases, and box 8 cannot be greater than box 6 for sales, even if you are not using EU tracking. This will prevent submission of negative numbers in Boxes 6 and/or 7, if boxes 8 and/or 9 do not match. Messages prompted are “Total EU purchases must not exceed the total purchases amount.” and “Total EU sales must not exceed the total sales amount.”. This issue was fixed in the Oct 2020 Fall release (GP 18.3) to remove all validations.
13. The total amounts in box 6,7,8,9 are missing SOP/POP transactions on the VAT DAYBOOK summary report (but the detailed reports are correct). What are the work-arounds to get this filed to the HMRC so I do not miss a deadline?
This was fixed in the Oct 2020 update for GP 18.2.
GP 2016 still has an issue with SOP transactions missed in Box 6. You will need to use one of these options as a work-around:
• Use the VAT 100 Return instead. The VAT 100 return will pull all tax codes for your date range to calculate totals for each box on the return. The 'total amount' boxes are also editable if you just need to get it submitted electronically to meet a deadline. (If you edit totals make sure those transactions also get marked off in the TX30000 table, so they are not pulled again on a future return.) Also remember that all debtors/creditors are required to have the Country Code field populated in order to pull on to the VAT 100 return. (CCode field in PM00200/RM00101)
• Inquire to the HMRC, as they may grant a direct upload process for you.
I hope the above information will be helpful to you so you can utilize this new functionality and get your VAT Return filed electronically!
Cheryl WaswickSenior Technical Support EngineerMicrosoft Dynamics GP Support
Hi Cheryl, we are been asked by client why Dynamics GP is not listed on HMRC website as approved software or in development.
Thanks for the great post!
I have a question regarding multi currency, one of our GP companies has been setup with functional currency as US dollars, will this new functionality support any currency other than GBP?
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