HMRC Announces Making Tax Digital Delay

HMRC has announced a further deferral of Making Tax Digital (MTD) for all Government Information and NHS Trusts (GIANT) system users. The new implementation date is set for April 2026, offering affected organisations additional time to prepare for the transition.

How will MTD affect VAT rules?

It is currently unclear from HMRC whether this deferral will coincide with the anticipated reforms to the contracted-out services (COS) VAT rules, but we will endeavour to keep you informed on both developments.

Currently, Government and NHS bodies are still required to submit monthly returns via the GIANT system together with a VAT 21 Form analysing VAT recovery by input tax and COS headings. It is our understanding that HMRC’s current MTD platform cannot accommodate the additional VAT 21 information.

Future Expectations

Despite the deferral, GIANT users should not wait until the last minute to adapt. The April 2026 deadline will require:

• Digital Record-Keeping: Start transitioning to systems that support MTD requirements.
• Process Audits: Review existing VAT return processes to ensure compliance with future MTD standards.

Support for NHS Clients and GIANT Users

HMRC has stated that once a decision has been made regarding the start date for using MTD software, notification will be provided at least 12 months in advance. This will allow sufficient time to prepare for and complete the transition to MTD.

If you are not sure whether you are prepared for the changes, we offer an MTD readiness review to compare current record-keeping and VAT return processes against the MTD requirements.

Please contact us for further assistance. We will keep our NHS clients updated on any developments.

If you have any questions or comments, please do not hesitate to contact our team today via the button below.