New Forest


Making Tax Digital for Charities

Making Tax Digital (MTD) is less than 6 months away and the new legislation will affect charities who are VAT registered and above the £85,000 VAT turnover threshold. The new legislation is designed to transform the current UK Tax system and will require charities to submit their VAT returns digitally.

The key things to check to ensure you’re ready are:

  • Software – Is it compliant? If you are using an online accounting software, it needs to be able to receive information from HMRC via an API (Application Programme Interface).
  • Budget for the cost – You may need to make an allowance in your budget for the upgrading of current software or the purchase of new software to ensure your compliance.
  • When your VAT quarter falls – You will need to check in what quarter your VAT return is due as this will determine your back stop date. This may mean that you have a few more months to comply, so it’s important to check now.
VAT Return QuartersMTD Start Date
Ending 31 March, 30 June, 30 September, 31 December1 April 2019
Ending 30 April, 31 July, 31 October, 31 January1 May 2019
Ending 31 May, 31 August, 30 November, 28 Feburary1 June 2019

The deadline is very close now and is proving challenging for all businesses, especially charities. For those still using manual records or spreadsheets, an alternative spreadsheet method is being worked on and commercial developers are exploring a bridging software to assist charities who have more complex requirements so they are able to meet the 1 April 2019 deadline.

We would recommend that you review the above points and make sure your charity is on track for the transition before the deadline.

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Many partners & the self-employed may have spent a few days a month working from home before the current crisis, but now almost everybody is working from home. There are a few small tax breaks for this, where you can claim tax relief on work related expenditure incurred.

The amount of the grant is 80% of average profits for 3 years to 5 April 2019. The grant is capped at £2,500 a month for the initial 3 month period. This scheme has been extended for 3 months from 1 June but reduced to 70%, capped to £6750.

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