Making Tax Digital – delay for some VAT businesses

We previously reported that from 1 April 2019, VAT registered businesses with a turnover above the VAT registration threshold (currently £85,000) will be required to keep digital records and submit their VAT returns via the Making Tax Digital for Businesses (MTDfB) system.

HMRC has now announced a delay to the introduction of mandatory Making Tax Digital (MTD) of six months, until 1 October 2019, for a small group of businesses with more complex requirements. HMRC has recognised there is still work to be done for businesses with more complex affairs. In particular, they want to ensure there is adequate time for such businesses to participate in testing.

The delay will apply to any VAT registered businesses which fall into one of the following categories:

  • Trusts
  • Unincorporated ‘not for profit’ organisations
  • VAT divisions and VAT groups
  • Public sector entities required to provide additional information on their VAT return (Government departments, NHS Trusts)
  • Local authorities
  • Public corporations
  • Traders based overseas
  • Those required to make payments on account
  • Annual accounting scheme users

Any business that doesn’t fall within the above is still required to comply with MTD from 1 April 2019.

Either way, VAT registered businesses with a turnover below the registration threshold will not be mandated to use the system until April 2020 at the earliest. However, they can voluntarily choose to do so beforehand.

Get in touch with a member of our Making Tax Digital team on 01903 234094 if you require any advice on MTD compliance.

A version of this blog originally appeared on the website of one of our MHA association member firms, Larking Gowen.