VAT: Making Tax Digital
Over the last few months its been difficult to avoid the introduction of Making Tax Digital (‘MTD’), a new approach to VAT reporting that affects all VAT registered businesses from 1 April 2019 with taxable turnover over the VAT threshold, currently £85,000. There is no exemption from the MTD requirements for VAT registered charities, although many that are not limited companies will have had their start date deferred to their first VAT return period starting on or after 1 October 2019. For those making quarterly returns this means that the quarter ended 31 December 2019 will be the first that needs to be filed with HMRC in accordance with MTD principles.
To comply with MTD charities will need to keep digital records and submit their VAT returns using MTD compatible software. If you have not already done so, you should review your systems to determine whether you are ready for MTD or need to implement changes to be able to continue to meet your VAT reporting obligations.