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Making tax digital

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From 1 April 2019, all VAT registered businesses with a taxable turnover above the VAT threshold of £85,000 will need to be compliant with new HMRC Making Tax Digital reporting requirements.

This applies to all VAT registered charities, though more detail about deferred starting dates can be found here for particular exceptions.

VAT registered organisations will be required to keep digital records and send the returns to HMRC using new Making Tax Digital-compatible software. In the initial year-long soft-landing period, this will require bridging software at the minimum. After April 2020, the mandated start date, organisations will need to have fully compatible software that is HMRC approved.

Why make tax digital?

The intention of HMRC is that these new digital processes will eliminate the majority of previously paper-based processes, increasing the effectiveness and efficiency of the system for taxpayers in the long term.

Ensuring compliance with the new requirements

The information required by HMRC and the deadlines for VAT returns and payments are not changing.

The Charity Tax Group have a fantastic page of resources to comprehensively break down the new requirements in more depth, which can be found here.

There is a variety of different software available to help with compliance, depending on the needs of your organisation. Check with your own software supplier to see what they are offering, as they may be able to give you a deal.

PwC is offering a simple, spreadsheet-based piece of software that is HMRC-approved and is free to registered charities.

Page last edited Jan 30, 2019

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