Following last week’s announcement from HMRC that there will be a six-month delay to the mandate for certain VAT Groups, many higher learning institutions will be asking; ‘what does this mean for Universities’?

Showing their commitment to transforming the future of tax submissions, HMRC is deferring the first Making Tax Digital deadline for over 40,000 firms. This extra time will facilitate stronger uptake of their pilot programs and allow successful testing of their new online VAT service, ahead of 2019’s mandatory deadlines.

“We have made the decision to delay mandation for these customers [with more complex requirements] until 1 October 2019 to ensure there is sufficient time to test the service with them in the pilot before they are mandated to join.” – HMRC, October 16th, 2018

The firms in scope for new deadline include:

  • trusts
  • ‘not for profit’ organisations that are not set up as a company
  • VAT divisions
  • VAT groups
  • public sector entities required to provide additional information on their VAT return (Government departments, NHS Trusts)
  • local authorities
  • public corporations
  • traders based overseas
  • those required to make payments on account and annual accounting scheme users

The University Impact

For Universities with subsidiaries / VAT entities that are not part of their VAT Group, HMRC will need to clarify whether these entities need to file via API from April 2019.

Speaking to many Universities across the UK, the API link alone will not support HMRC’s full digital vision. Looking ahead to 2020’s “digital link” requirement, an API link between an Excel and HMRC’s VAT portal will not allow universities to store adjustments, like partial exceptions, in a data repository.

Many universities appear to be at the forefront of HMRC digital journey – looking to go beyond compliance and create a more streamlined, less manual approach to tax submissions. They want a platform and process that takes into account future developments, such as corporation tax, EC Sales Lists and ultimately the move towards real-time VAT reporting (as seen in of Spain, for example).

Making Tax Digital Delay

The Making Tax Digital delay will impact 3.5% of HMRC’s customers.

Key takes aways from HMRC’s deadline extension

  • Following the Making Tax Digital delay, firms who felt time-pressured for a “quick-fix” now have six months to create a more comprehensive implementation.
  • Deferred firms can (and are encouraged to) take part in the pilot from Spring 2019. This will help them get ahead of the curve and test their digital process prior to the October deadline.
  • It’s vital that firms given the deferral use the extra time to manage the project, rather than to delay for six months.

Arkk is working with Universities as well as other organisations of all shapes, sizes and sectors to ensure they are supported by a future-proofed solution. Making Tax Digital is an opportunity to benefit from a totally digital approach to financial and tax reporting, with an array of business advantages.

If you are interested in finding out more about how we can help and why we think this HMRC announcement should spur your organisation towards a more streamlined, digital future, get in touch with our team today.


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