Limited number of taxpayers will qualify for delay to start of digital reporting

22 Jan 2019

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Notwithstanding calls for the introduction of Making Tax Digital (MTD) to be put back in the light of uncertain times predicted ahead – not least due to Brexit – HM revenue & Customs (HMRC) is pressing ahead with the first part of MTD in relation to VAT.

HMRC has, however, written to a small percentage of taxpayers allowing a six month deferral, with a commencement date of 1 October 2019. Those exceptions cover the following categories: trusts; not-for-profit organisations set up as a company; VAT divisions; VAT groups; traders based overseas; those required to make payments on account; annual accounting scheme users; a number of public sector entities.

Sean McGinness, a Director and a member of Saffery Champness’ Land & Rural Group, comments:

“Most VAT registered businesses are required to use MTD to keep and file their VAT records from 1 April. However, for a number of categories that start date has been put back, and they must start using the MTD process for their first VAT return on or after 1 October 2019.

“For those who have not received a letter of derogation then 1 April is their start date. However, if you think you are eligible for a deferral and have not heard from HMRC you should write to HMRC Making Tax Digital at the earliest opportunity.

“There is also likely to be some discrepancy, as the derogation only applies to single VAT registration numbers. This is particularly relevant where farms and estates comprise several businesses with individual VAT numbers and some numbers will find that they qualify for the deferral whilst others may not.”