HMRC delays mandatory digital VAT filing for ‘complex’ cases

The taxman has potentially embarrassed the small business minister after she warned companies covered by Making Tax Digital not to expect any further hiatus.

In an MTD update just days following the minister’s warning, HMRC said that “for a small minority of businesses,” the department had decided to implement a delay of six months.

To ensure there is “sufficient time” for testing the digital VAT system, outfits with “more complex requirements” have until next October, not April 2019, before it is made mandatory.  

HMRC added: “The deferral will apply to around 3.5% of mandated customers.

“These businesses have until 1 October 2019 to start keeping records digitally and using MTD-compatible software to send their VAT returns to HMRC.”

The list of entities includes government departments, councils, traders based overseas, trusts and those required to make payments on account and annual accounting scheme users.

For the unaffected 96.5% of customers, the April 1st 2019 deadline for filing VAT returns using the digital system remains in place, as it will even if they fall below the VAT threshold.

HMRC also says that VAT-registered businesses can join the MTD pilot now, but a timetable for those firms which are ineligible is online to show when the pilot should be open for them.