Making Tax Digital – 1st October deadline reminder

30 September 2019

We would like to remind VAT registered councils that the implementation date for Making Tax Digital (MTD) is 1st October 2019. Any council that:

a) Is VAT registered, and
b) Has taxable sales of goods and services in excess of £85,000 (excluding VAT)

should already have contacted their software supplier and ensured that they are able to keep digital accounting records from 1 October (which they will be, if they are using accounting software or spreadsheets) and able to submit a VAT return directly from their software for the quarter ending 31 December 2019. The council’s accounting software needs to be set up (possibly by their supplier) to link to the council’s Government Gateway account. It should then be a simple matter of pressing a button to submit the VAT return.

Any VAT registered council with taxable sales of less than £85,000 is not required to register for MTD but can do so if they want to. They need to ensure that they have compatible accounting software first.

Where a council is not VAT registered and submits a VAT126 form instead, MTD does not affect them at all and no action is required.

Some councils may have received a standard letter from HMRC saying that they missed the April deadline. However, the Government deferred the implementation date for all local authorities to 1 October 2019, as set out in the HMRC communications pack on MTD. We suggest responding by pointing out that the council is a local authority, that implementation for local authorities was deferred to 1 October and refer them to their own communications pack. If the council’s taxable sales are less than £85,000, this should be stated in the response.

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