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Update on Making Tax Digital for VAT – August 2019

Charities continue to be concerned about Making Tax Digital

Making Tax Digital for VAT came into force on 1 April 2019 but HMRC introduced a deferral until 1 October 2019 for certain VAT registered traders, including not for profit organisations that are not set up as a company, trusts, VAT groups, annual accounting scheme users and those required to make payments on account. Many charities are covered by this concession but at a recent Making Tax Digital event held by Civil Society Media, the charities present voiced their concerns over the requirements.*

Attendees spoke of concerns over elderly volunteers who were unable to file expenses digitally and the hidden cost of training workers to comply with the legislation, particularly considering the reliance many charities have on volunteers.

Speaking at the event, Verna Gellvear, HMRC’s engagement manager said that HMRC will not be handing out penalties to charities that are “making an effort to comply”. However, organisations that make no effort to comply or file incorrect numbers would be penalised.

HMRC relaxes MTD rules for fundraising events

HMRC has eased the rules and regulations around Making Tax Digital for fundraising events. It has relaxed the digital record keeping requirements for charities when reporting on fundraising events.

HMRC said it 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.”

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

“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.”

Do you need help with MTD?

Watch our webinar

You may be interested in watching our short webinar produced by our Making Tax Digital team which provides an overview of the new legislation, and addresses the main queries and concerns that businesses have about the new way in which to administer their VAT from 1 April 2019:

Readiness Review

We understand that this may be a considerable change for businesses and, as a result, we have developed a Making Tax Digital readiness review which will help businesses understand what will be required to remain compliant and avoid penalties.

Please contact VAT partner Alison Birch if you would like further information about MTD and how it might impact on your charity.

Contact us


Charity Newsletter Autumn 2019