Charities and MTD – Are you prepared?
The deadline for “Making Tax Digital” is fast approaching, as for VAT periods commencing on or after 1 April 2019, most VAT registered entities with taxable turnover above the VAT threshold (£85,000) will need to keep their records digitally and send their VAT return data to HMRC using MTD-compatible software.
Charities that are constituted as a trust or not for profit organisations not set up as a company are only mandated to move to MTD VAT from 1 October 2019. Charities operating within a VAT group are also deferred to October.
Even if the charity itself is not VAT registered, consideration must still be given to any trading subsidiaries that do have taxable turnover above the £85,000 threshold and will therefore have to comply with the new requirements.
You can take some quick steps to prepare for MTD ahead of 1 April by:
• looking at how you can keep your records digitally, if you do not already
• asking your software provider about when it will be MTD-compatible
• looking at your internal operations to make sure processes are digital
• considering joining the MTD VAT pilot as soon as you are able to
For many it may just be a case of updating existing software, but for others, new or bridging software will need to be purchased.
If you are required to comply from 1 April, it is important to ensure that everything is in order before then, to make the transition as smooth as possible.
If you have any queries on MTD, please contact Jack Steer or call us on 01772 821 021.