Charities have been handed an additional 12 months to comply with Making Tax Digital after it comes into force in April 2019.
Speaking at a recent tax conference, HMRC’s head of strategic design for the MTD system Oliver Fisher said there would be a “soft landing” period for the first year where charities would not be penalised for non-compliance.
This still means, however, that charities will need to use the digital tax system for VAT purposes from April 2019 onwards.
But failure to get it right ‘first time’ will not result in penalties – for the first 12 months at least.
It is important that charities do not see this development as a ‘get out of jail free card’. The importance of keeping charity accounts in order is paramount, and from April 2019, Making Tax Digital will be the only system charities can use to do this.
This is why we say you should be getting digital tax right from day one.
Further information about Making Tax Digital can be found on HMRC’s website here, but charities are always advised to seek specialist advice relevant to their unique circumstances.