Making Tax Digital at Arch – Our Success Story
Background
In 2019, the UK government introduced Making Tax Digital (MTD), an initiative that requires businesses to keep digital records and submit quarterly VAT returns using compatible software. For Arch, this presented an opportunity to develop a software solution that would help businesses comply with MTD regulations.
Although Arch is a small company, we have a deep expertise in SAP, which we have been using to manage our own accounts for many years. In fact, we utilize the standard SAP functionality to generate our quarterly VAT reports. Like other businesses in the UK, we are also required to submit these reports electronically, using specialized software.
Having reviewed the available options, we decided to build our own solution for this purpose.
After our assessment of the available choices, we opted to create our own solution using Stelo, our custom SAP business process development framework.
Approach Analysis
We undertook a process of appraising the various options open to us to adhere to the Making Tax Digital (MTD) rules. These included:
- Standard SAP solution using additional components in SAP Cloud
- Third party hosted solution
- Develop our own solution
We found the cost of the standard SAP solution to be prohibitive, so we quickly dismissed it as an option. Our goal was to integrate our back-end SAP solution with HMRC’s MTD services, but the available third-party solutions were either costly, lacked integration, or both. We didn’t see the value in exporting reporting data from SAP to a file for uploading through a hosted service.
Ultimately, we decided to pursue the option of developing our own solution. This entailed registering ourselves with HMRC as a provider of integration services and building the necessary integration layer.
Our Journey
We quickly established that the development of a solution could be achieved using our own software suite, and we began by creating a proof-of-concept to call various HMRC services.
For speed, initially we designed an HTML eForm solution using our product Varo, which pulled in VAT data from SAP by running the standard report. Then we added the integration to HRMC from the eForm.
Varo provides automatic benefits, such as a history of all the forms submitted, and an audit trail, plus the capability to reprocesses forms in error and does not require the SAP Fiori Framework so it works on older SAP systems.
Having run the eForm solution on Varo for a several months, we decided to upgrade our solution to a SAP UI5 Fiori app, using Stelo. This improved the usability and ensured that we made use of newer SAP UI technology.
The end-to-end process is easy to use, with seamless integration.
Since the first iteration of the Stelo app we have added enhancements to comply with additional requirements from HMRC.
Benefits
We have found three major benefits of developing our own MTD solution.
Firstly, it is completely free of charge, with no subscription fees for cloud services from SAP or third-party providers.
Secondly, we have full control over the solution and can easily add new functionalities to meet the evolving MTD requirements.
Lastly, we can share our solution with other businesses.
Please get in contact with us if you would like to learn more.