Making Tax Digital ‘phase two’ delayed due to Coronavirus

(2 minutes to read)

CIOT: ‘We welcome the announcement to defer for a year the requirement to digitally link separate software programmes in the VAT return ‘journey’’.

In light of the impact of Coronavirus, the digital links requirement of Making Tax Digital (MTD) for VAT will be deferred by 12 months to 1st April 2021.

‘Phase one’ of the MTD for VAT requirements meant that businesses had to sign up to MTD and submit their VAT returns to HMRC directly from their software. ‘Phase two’ required businesses to digitally link their software all the way from entry of each transaction at one end of the process through to submission of the VAT return at the other, irrespective of how many pieces of software were used.

The Chartered Institute of Taxation (CIOT) welcome the news that this is to be delayed.

Tina Riches, Chair of the joint CIOT and ATT Digitalisation and Agent Services Committee, explained, “We welcome the announcement to defer for a year the requirement to digitally link separate software programmes in the VAT return ‘journey’. This obligation will therefore only commence from the first VAT return period starting on or after 1st April 2021.”

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Tina Riches added, “Many businesses are working hard simply to survive these unprecedented times. We know that some businesses, particularly those with legacy or complex systems, were struggling to meet the deadline for this requirement. This announcement helps those businesses focus on doing the business they can and managing the Covid-19 challenges, rather than dealing with changes to how they keep their business records.”

John Cullinane, CIOT Tax Policy Director, added, “When we started to appreciate the likely impact of COVID-19 on businesses we wrote to the Financial Secretary to the Treasury, Jesse Norman MP, suggesting a number of easements to help businesses through this difficult period. A deferral of the digital links requirements was one of our key suggestions and we are pleased that the Government agrees that this is one measure that can be put on ice while businesses concentrate on survival.

“We continue to work with the Government and HMRC in resolving the many questions that people have about the response to the COVID-19 challenge, so that businesses and individuals can better understand how they can be helped, and to ensure that every opportunity is taken to avoid imposing unnecessary burdens during a time of crisis.”

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Dolan Accountancy was set up by Simon J Dolan, the man behind the well-known brand SJD Accountancy. With over 25 years experience in the contracting marketing, Dolan Accountancy has the heritage, reputation and credibility you can trust. Working closely with our sister company, Contractor Umbrella, it means we can offer one low cost, fixed fee package at £95 + VAT per month. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost. We don’t believe in tiered packages or hidden extra fees, instead we aim to give you everything you need, including:

  • Free Company Formation – This is where it all begins. Once you have decided on an available name, we will form your company free of charge (if using our accountancy services) and it will be ready for you to use in as little as three hours.
  • Free use of Contractor Umbrella – With changes in Public Sector IR35 Legislation we understand that sometimes you are required to contract via an umbrella company. We will keep your limited company ticking over, while you work margin free via our sister company, Contractor Umbrella.
  • A Dedicated Accountant – Your accountant will be there for any company or personal tax advice that you require. We will never outsource work, even to internal teams.
  • Free Access to FreeAgent – The founder behind the multi award winning FreeAgent platform was one of Simon’s first clients, therefore it only seems fitting that we offer all of our clients access to FreeAgent, free of charge.
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  • Free Registered and Director’s Service Office Address – Sometimes you just don’t want your home address on display at Companies House. When you sign up to our accountancy services, we will offer the use of our address as an alternative.
  • Your Business and Personal Taxation Needs – This includes Company Accounts, Director’s Personal Tax Return, VAT Returns, Payroll, Corporation Tax and Dividend advice, to name just a few.
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