HMRC delay Making Tax Digital for charities

In an announcement that will most likely come as welcome news for many charities and charitable trusts, HMRC has given charities an extra six months to comply with the Making Tax Digital (MTD) requirements.

Currently in pilot phase, the Government’s MTD scheme was due to come into effect in April 2019 for organisations with a turnover of more than £85,000. However, in an announcement made by HMRC yesterday, a new implementation schedule was unveiled which sees charities, amongst others, given an extra six months before MTD becomes mandatory for them. They now have until October 2019 to comply and will be able to join the pilot scheme from Spring 2019.

In order to use the pilot, the right software will be required and HMRC has provided a list of compatible software to help. If your software isn’t on the list or you’re not sure if it will be up to date in time, check with your providers or speak to Terri Bruce, our Making Tax Digital for VAT and charity specialist.

It seems charitable companies have not been so lucky, as this deferral only applies to those not set up as companies. Therefore, incorporated charities will still have to comply from April 2019.

Despite this deferral, the ‘soft landing period’ of one year is designed to allow those who are ‘doing their best to comply’ some reprieve from filing and record-keeping penalties, will seemingly still only run until April 2020.

The deferral for mandation to October 2019 applies to entities which fall into one of the following categories:
•    trusts;
•    ‘not for profit’ organisations that are not set up as a company;
•    VAT divisions;
•    VAT groups;
•    those 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.

For more information or for a free one hour system review to ascertain whether you are ‘MTD-ready’, get in touch with your usual Moore Stephens Adviser or contact Terri Bruce.


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