Government extends ‘soft-landing period’ for compliance with Making Tax Digital

21 Jan 2019 News

Charitable trusts have been given an extra six months’ “soft-landing period” to fully comply with the government’s digital tax requirements, HM Revenue & Customs has announced.

The government’s Making Tax Digital (MTD) scheme for VAT returns is currently being piloted and will be mandatory for most organisations with a turnover of more than £85,000 from April.

After concerns about compliance with the scheme, HMRC announced a “soft landing period” meaning organisations will only need to fill in nine boxes of information from April 2019 in a spreadsheet, which is then automatically linked to HMRC using application programming interface (API) bridging software.

In October last year, HMRC announced a new implementation schedule which means that trusts and organisations that are either unincorporated or a member of a VAT group registration will have their mandatory compliance date deferred to 1 October 2019.

While this was welcomed by the sector at the time, some concerns were raised by the Charity Tax Group that the soft landing period for these organisations would still only go to April 2020.

However, HMRC announced on Friday that the soft-landing period for these deferred organisations will run until October 2020, so they will have a full year.

It said: “During the soft landing period only, where a digital link has not been established between software programs, HMRC will accept the use of cut and paste as being a digital link for these VAT periods.”

CTG welcomed the news on Twitter.

Charitable companies that are not a member of a VAT group will still have to comply by April 2019 with their soft-landing period running until April 2020.



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