MTD ‘delay’: Have you understood Giant implications?

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A delay of sorts for MTD for VAT was recently revealed by HMRC.

Did you see the news?

It’s something you’ll want to pay attention to if you have any interest or dealings with the small number of businesses using the GIANT (Government information and NHS Trust) service to provide additional information with their VAT return.

Talk of any kind of delays to MTD, with all the legwork that has gone on to prepare for it, may spark concern.

But this is ultimately a very niche area of the regulations and, actually, HMRC had already allowed the April deadline to be deferred for a small proportion of organisations due to the complexity of their requirements.

This latest move simply pushes this back further for that even tinier percentage operating under GIANT.

We don’t know exactly how long it will be delayed for, but we’re certain that the number of businesses impacted will be low.

It’s worth a quick look at what Theresa Middleton, HMRC’s Director for Making Tax Digital for Business, said in an email the other week.

She said the “vast majority of the deferred group” will still start using the service for their first VAT return for the period starting on or after 1 October 2019. So, that’s all of them except for those affected by GIANT.

She wrote: “Customers who use the GIANT service are currently required to submit additional information with their VAT return. Due to an ongoing review by the government into VAT simplification in the public sector, we will be extending their deferral period.

“The effect of this deferral for these customers is that they should continue to submit their VAT returns as they do now.”

This review, announced by Chancellor Philip Hammond at the Spring Statement, is assessing a potential reform to VAT refund rules for central government, with the “aim of reducing administrative burdens and improving public sector productivity”.

Ms Middleton explained that the review is still underway, and that she and HMRC bosses will need to consider the outcome in the context of MTD for GIANT customers.

All affected businesses will get a letter from HMRC again later in the summer, with further information about the timetable for joining Making Tax Digital, and to formally extend their deferral period.

For now, many accountants will be focusing on the first MTD for VAT quarterly submission deadline of August 7. And it seems confusion around registering accounts, and the process surrounding this, is the biggest issue causing trouble. Discover in this blog how to overcome this hurdle.

Have a query about MTD? One of our dedicated specialists would be very happy to speak with you. Email us at [email protected]