NHS trusts and government departments have been granted a further deferral of the start date for MTD for VAT, beyond 1 October 2019

Businesses and entities required to be VAT registered as they have VATable income exceeding the VAT registration threshold must sign-up for Making Tax Digital (MTD) to submit VAT returns using MTD-compatible software for periods beginning on or after 1 April 2019, unless they have been given a deferred start date.

In October 2018, HMRC announced that “complex businesses” would have a deferred start date for MTD for VAT. All of those deferred businesses should now have received a letter from HMRC inviting them to join MTD and reiterating that the MTD service must be used for VAT return periods beginning on or after 1 October 2019.

The list of deferred businesses includes all public sector entities which are required to submit additional information alongside their VAT return, such as NHS trusts and government departments. Those entities use a special online system to submit that additional information known as the GIANT service (Government Information and NHS Trust).

GIANT leap

On 17 June 2019, HMRC made it known to the professional tax and accountancy bodies that the entities that use GIANT would not be able to start using MTD for VAT from 1 October 2019, and instead they would be given a further deferral to a date which has not been announced.

The affected entities should have received a letter from HMRC informing them of this extra time to prepare for MTD. A further letter will be sent later this summer to give a revised timetable for the mandating into MTD for VAT.