Good financial management is essential to the efficient management of a Local Council.
ChALC provides a number of model documents and publications to help Clerks and Councillors navigate the rules.
How will HMRC's introduction of Making Tax Digital affect local councils. Councils that are not VAT-registered and reclaim using a VAT126 form will not be affected during 2019/20, nor does it seem likely at present that they will experience a change in 2020/21. Councils that are VAT registered may be pleased to hear that HMRC announced in October that local authority participation in Making Tax Digital for VAT has been deferred for six months and will commence on 1 October 2019, not in April. Councils will not have to submit VAT returns digitally until then but may join the pilot scheme from 1 April 2019 if they wish.
Making Tax Digital will require all affected bodies to keep their records digitally and submit VAT return figures directly from the software, rather than entering the figures manually. 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 1 April 2019. In addition, at least one company has already produced an interface for spreadsheets, so that the relevant data can be submitted digitally.
The deferral to 1 October 2019 also applies to VAT registered trusts and not-for-profit organisations, unless they are set up as a company. No other taxes will be affected before April 2020.