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HMRC writes to businesses permitted to defer MTD

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HMRC will shortly begin sending letters to those businesses it has identified as falling within the group permitted to defer compliance with making tax digital (MTD) until October 2019.

In October 2018, HMRC announced a delay of six months, until 1 October 2019, for the introduction of mandatory MTD in relation to a small group of businesses with ‘complex requirements’. HMRC has since undertaken a detailed exercise to identify all customers that fall within this group and will shortly start issuing letters to every customer affected.

The letter will constitute a specific direction under the VAT Regs 1995 that, until October 2019, the business can continue to make VAT returns using existing methods other than ‘functional compatible software’. The letter is also a notification of exemption from the requirement to keep digital VAT records.

HMRC has provided the CIOT with a sample copy of the letter. See

HMRC announced in December 2018 that the MTD pilot for VAT is now open to partnerships, and that businesses using the VAT flat rate scheme are no longer excluded.