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HMRC eases Making Tax Digital requirements for fundraising events

08 May 2019 News

HMRC building

Fergus Burnett

HM Revenue & Customs has made it easier for charities that run fundraising events to comply with its upcoming digital reporting requirements.

The department has added a new section to its Making Tax Digital VAT notice, relaxing the requirement for charities to use digital links when reporting on fundraising events.

Some organisations with a turnover of more than £85,000 already have to comply with MTD requirements for VAT returns.

However, charitable trusts, unincorporated charities and those in a VAT group do not need to comply until October, when there will be a 12-month “soft landing period”.

HMRC’s notice recognises that “charities may find it difficult to meet the strict digital record keeping requirements for events run by volunteers”.

It adds: “Therefore, HMRC will accept that charities can record digitally all supplies made relating to the event as if it were a single invoice, and all supplies received can be treated similarly.”

Church fete example

The example it gives is of a charity running a church fete, during which volunteers create a record of the supplies made.

HMRC now says that in this situation the charity can record the total supplies made “at the same rate of VAT and with the same tax point as a single entry in their functional compatible software”.

Similarly, it says charities can record all supplies received “as a single entry in functional compatible software”.

‘Less onerous’

John Hemming, chair of the Charity Tax Group, said HMRC’s latest changes should make record-keeping for charity fundraising events less onerous for charities.

He said CTG had previously highlighted the “practical difficulties” charities running events like fetes would face in complying with MTD.

“Often these events are run by volunteers and with limited internet/computer access, making it impractical to maintain digital links between the individual supplies made,” he said.

“HMRC had not considered these types of situation, but officials have listened and responded in a pragmatic way, allowing special treatment for charities in these circumstances.

“This relaxation of the digital links requirements should make record-keeping for charity fundraising events less onerous for charities and the Charity Tax Group will continue to work with HMRC to ensure that the wider digital links requirements are implemented in a practical and proportionate way.”

Civil Society Media's Making Tax Digital seminar takes place on 21 May. Explore what HMRC’s new policy means for you as a charity, optimise your accounting systems and become more efficient in how your charity handles its tax affairs. View the programme and book online.



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