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Making Tax Digital for Government Information and NHS Trust service users

A small proportion of businesses within the scope of Making Tax Digital (MTD) for VAT previously received a short deferral of mandation.  This was due to the complexity of their requirements and the need to ensure there was time to test the service with them before they were required to join.

HMRC’s initial intention was that all these businesses would start using the service for their first VAT return for the period starting on or after 1 October 2019. This is still the case for the vast majority of the deferred group.

Those who use the GIANT (Government Information and NHS Trust) 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, HMRC will be extending their deferral period. This will be communicated to each affected business direct this week to inform them of this extension.

HMRC will write to them again later in the summer with further information about the timetable for joining Making Tax Digital, and to formally extend their deferral period.

The effect of this deferral for those affected is that they should continue to submit their VAT returns as they do now.

The review in question was announced at Spring Statement 2019 and is exploring a potential reform to VAT refund rules for central government, with the aim of reducing administrative burdens and improving public sector productivity. The review is still underway, and HMRC will need to consider the outcome in the context of MTD for GIANT customers.

All other elements of the VAT service will continue as planned. MTD was mandated for VAT for the majority of businesses from April and will be mandated for deferred customers who do not use the GIANT service from October.

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