22nd October 2018

Many of you will now be aware of the impending introduction in April 2019 of Making Tax Digital for VAT which, according to HMRC, will make things ‘easier for tax payers to get their tax right.’ Their latest update on the time for MTD for VAT has been published, which can be accessed by clicking here.

HMRC has announced a delay to the mandatory introduction of MTD for those

VAT registered organisations that have more complex VAT reporting issues, which includes:

  • Trusts
  • ‘not-for-profit’ unincorporated organisations
  • VAT groups and VAT divisions
  • Those making payments on account
  • Those on annual accounting
  • Businesses established outside the UK
  • Local authorities and public corporations
  • Public sector entities such as Government departments and NHS Trusts

Speaking of the latest MTD development, UNW VAT Manager Ian Coulthard said: “The delay in the introduction of MTD for these organisations is very welcome and is perhaps finally an admission by HMRC that MTD is not as straightforward as they thought it would be for a significant number of taxpayers. For everyone else, however, it seems that MTD for VAT will still be going ahead from April 2019.

“It is probably worthwhile mentioning that many businesses that do not have complex VAT reporting issues and use one of the more commonly available accounting packages (SAGE, Xero, Quickbooks etc) are likely to be able to cope with the introduction of MTD relatively easily. Those accounting packages should be able to offer a straightforward solution to VAT return filing online.

“Where the accounting package does not file the VAT return direct to HMRC, with a partially exempt business for instance and a spreadsheet is used to calculate VAT due, then a bridging software will be needed to link the spreadsheet to HMRC.

“Here at UNW, we have been talking to several software providers about the solutions they can offer to our clients for bridging spreadsheets to HMRC and we will be providing further updates on this shortly.”

HMRC has also this week announced an extension of the MTD for VAT pilot scheme to sole traders and companies (outside of those already mentioned above).

If you would like to discuss any of the points raised in this article, or any other VAT related matter, you can visit our VAT and Customs page or you can contact one of our VAT specialists directly via the details below:

Mark Hetherington
VAT PartnerDirect Dial +44 (0)191 243 6073
Email markhetherington@unw.co.uk
Ian Coulthard
VAT ManagerDirect Dial +44 (0)191 243 6017
Email iancoulthard@unw.co.uk
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