VAT and Tax updates

Making Tax Digital for VAT
Organisations will be required to comply with Making Tax Digital (MTD) for VAT from 1 April 2019. However, HMRC has recently announced that the start date will be deferred by 6 months to 1 October 2019 for a number of different types of entity including:
– Trusts
– Not for profit organisations that are not set up as a company
– VAT groups
However, the MTD VAT soft landing period ends on 1 April 2020, and there will be no 6 month extension of this.
If you have any questions on what you’ll need to do to comply with MTD for VAT, please get in touch with us. As a first step, we recommend you get in touch with your accounting software provider to make sure they will be making the necessary updates to the software.
VAT on e-publications
Currently printed publications are zero-rated, but the same publications in electronic form are standard rated. However, the EU has just announced that it will permit member states to tax e-publications at the same rate as printed publications. It is not yet clear whether the UK will make this change. If it does, then one type of organisation it could impact on is membership organisations who provide a package of different supplies in exchange for a subscription fee.
Apprenticeship levy
Under the current apprenticeship levy rules, employers can transfer up to 10% of their unspent funds to another organisation. However, from April 2019 this limit will increase to 25%. Organisations with unspent funds should therefore consider whether there are any other organisations with a similar mission who could benefit from the funds. After 24 months, the government removes any unspent funds from an employer’s account.
Government Gateway
Services on the Government Gateway are gradually being moved to replacement services. All services will have moved by March 2019. Find out here how to get access to all HMRC online services.
Budget announcements
The 2018 budget took place on Monday 29 October. Key announcements for charities included:
– From April 2019 the small scale trading limit (which exempts non-primary purpose trading from corporation tax) will increase from £50,000 to £80,000 per annum (for charities with turnover above £200,000).
– From April 2019 the government will introduce a package of measures to reduce the administrative burden of the Retail Gift Aid Scheme for charities.
– From April 2019 the limit on the size of a single donation eligible for the Gift Aid Small Donations Scheme will increase from £20 to £30.
Further details on the budget can be found here.