Making Tax Digital deadline to be delayed due to coronavirus

31 Mar 2020 News

HMRC will delay the requirement to implement digital links for Making Tax Digital (MTD) due to the coronavirus pandemic.

In an email to the Charity Tax Group (CTG), HMRC said: “We understand that the impact of Covid-19 is creating extremely difficult times for all, and we are committed to helping in every way possible all those businesses facing unprecedented challenges.

“Therefore, we are providing all MTD businesses with more time to put in place digital links between all parts of their functional compatible software. This means that all businesses now have until their first VAT return period starting on or after 1 April 2021 to put digital links in place.”

The original deadline for the majority of organisations to implement these links was April 2020. For deferred organisations, which CTG says many charities are, the deadline was due to be October 2020.

CTG, which has published the email on its website, said a formal announcement is expected in due course and welcomed the move. It added that it “had been calling for this postponement to reflect the disruption facing charity finance teams and software suppliers, due to remote working and other more pressing work priorities”.

MTD is HMRC’s project to digitise the tax system. It says its ambition is “to become one of the most digitally advanced tax administrations in the world”. VAT is the first area of tax to be implemented under the scheme.

As well as this delay, the coronavirus has already led to a postponement in the introduction of the new IR35 regime. The need for many employers to determine if contractors should be taxed as employees has been put back to until April 2021.

Separately, the Charity Commission has promised to be “pragmatic” in allowing extensions for charities that are unable to publish their annual report and accounts on time due to coronavirus-related reasons.

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