UPDATE: HMRC published detailed VAT guidance that explained how Making Tax Digital will work in practice. Contrary to earlier Government statements (see below), from 1 April 2019 all VAT registered businesses (including charities) with a taxable turnover above the VAT threshold (£85,000) are required to keep their VAT business records digitally and send their VAT returns using Making Tax Digital (MTD) compatible software.

Read more here.

CTG responded to HMRC’s consultation on Making Tax Digital: Bringing business tax into the digital age. This is one of six consultations opened by HMRC, looking in detail at proposals that aim to reduce burdens for taxpayers and build a transparent and accessible tax system fit for the digital age.

CTG’s response, which can be read here, responded favourably to the Government’s suggestion that charities be exempt from the requirements to maintain digital records and to update HMRC at least quarterly, essentially giving a charity the chance to opt-in if it feels that it has sufficient capability and resources to do so. We also called for this exemption to be extended to wholly-owned trading subsidiaries of charities.

In addition, the response highlighted some of the wider digital developments that the Making Tax Digital agenda could facilitate, in particular relating to Gift Aid intermediaries. This position was set out in detail in CTG’s response to the recent technical consultation on the topic.

HMRC published full guidance on the Government’s Making Tax Digital agenda, as well as more information about the other consultations.