HMRC has announced a further deferral of Making Tax Digital to at least April 2025 for users of the GIANT (Government Information and NHS Trusts) VAT return system.
MTD is part of the Government’s plan to make a more efficient and streamlined tax system, making it easier for individuals and businesses to get their tax correct and keep it current and up to date. This became mandatory for most VAT-registered entities from April 2019 but has been deferred several times for GIANT users.
At present, Government and NHS bodies are required to submit VAT returns together with supplementary VAT 21 forms analysing business input tax and contracted-out services (COS) VAT recovery categories. The MTD platform is unable to accommodate this information.
Previous deferrals of MTD were said to coincide with the ongoing review of potential reforms to the COS refund system. This review is still being carried out by HM Treasury and any changes would require ministerial approval.
Although not specifically mentioned in the latest deferral announcement, it is HMRC’s expectation that MTD will become mandatory for GIANT users once the outcome of the review is known. HMRC has previously stated that the review is unlikely to be concluded during the current parliament, so not before April 2025. A further update will be provided in October 2024, when we would expect this to be postponed further.
In the meantime, GIANT users should still be preparing for the introduction of Making Tax Digital, including digital record keeping and digital links between VAT data where appropriate. If you are not sure whether you are prepared for the changes, we can offer an MTD readiness review, which will compare current record-keeping and VAT return processes with the MTD requirements.