When MTD for VAT was introduced in April 2019 a few types of businesses were granted a deferral of 6 months before they needed to sign up and HM Revenue & Customs wrote to those businesses they believed were subject to this deferral.
The deferral period is about to end and so those businesses will need to comply with MTD for VAT from their first VAT period starting on or after 1 October 2019.
This means keeping digital records and submitting their VAT returns via ‘functional compatible software’. But remember that MTD for VAT only applies where the annual taxable turnover is above the VAT threshold (£85,000). Those whose turnover is below this level can still sign up to MTD but for them it is optional.
The businesses subject to this deferral were:
- ‘not for profit’ organisations that are not set up as a company
- VAT divisions
- VAT groups
- those public sector entities required to provide additional information on their VAT return (such as government departments and NHS Trusts)
- local authorities
- public corporations
- traders based overseas
- those required to make payments on account
- annual accounting scheme users
Further guidance on what is meant by ‘Digital Records’ and ‘Functional Compatible Software’ can be found on our frequently asked questions page and if you need any support please do get in touch with your usual Streets contact or email email@example.com