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Have you received a notice from HMRC that your MTD for VAT start date has been deferred?

Certain “more complex” businesses have an extra 6 months to prepare for MTD for VAT. Businesses that fall into one of the following categories will only need to comply with MTD for VAT from the start of their first VAT return period commencing after 1 October 2019:

• trusts,
• ‘not for profit’ organisations that are not set up as a company
• VAT divisions,
• VAT groups,
• traders based overseas,
• those required to make payment on account and
• annual accounting scheme users
• Certain public sector entities such as NHS Trusts, local authorities, public corporations,

HMRC believe that they have written to each business they have identified that should have a deferred start date yet there has been a delay in sending out the letters and some businesses have been missed. If you consider that your business falls into one of the deferred categories but has not received a letter, it should contact the VAT helpline to request a letter as soon as possible.

These letters to deferred businesses do have legal standing. Any business that wishes to rely on the deferral must ensure that it receives (and retains) the letter notifying them that their start date has been deferred. HMRC has confirmed that if a business receives a deferral letter in error they can rely on having done so and need not comply with MTD for VAT until their first VAT accounting period starting on or after 1 October 2019.

HMRC has also indicated that the “soft landing” for digital links will apply for the first 12 months of mandation ie, for deferred businesses the digital links requirement will apply to VAT accounting periods starting on or after 1 October 2020.

If you have any questions or concerns regarding Making Tax Digital and how it affects you and your business please do not hesitate to get in touch.