A number of clerks have been asking about the impact of Making Tax Digital on local councils. Councils which are not VAT-registered will not be affected during 2019/20. Councils which are VAT registered may be pleased to hear that HMRC announced today that local authority participation in Making Tax Digital for VAT has been deferred for six months.
Councils will not have to submit VAT returns digitally until after 1st October 2019 but may join the pilot scheme from 1st April 2019 if they wish. Leading software providers in the sector have already addressed this issue and will be ready for digital VAT returns being submitted directly from the software from 1st April 2019.
The six month deferral also applies to VAT registered trusts and not-for-profit organisations, if they are not set up as a company.