By The content team Making Tax DigitalDelay in Making Tax Digital – but only for some20 Dec 2018 Businesses with complex VAT affairs will be given an extra six months to switch to the digital filing of returns to allow for a smooth introduction of Making Tax Digital for VAT (MTDfV).At the same time, HMRC has revealed it is losing some of its resources for MTD.These developments won’t help create momentum for the start of MTDfV on April 1 2019.But they are being viewed as sensible and pragmatic steps in the face of the major short-term challenges HMRC faces.6 month extensionThe change to filing arrangements was revealed when HMRC announced it is writing to a “small number” of businesses advising them they can continue current VAT filing arrangements until 1 October 2019.Executives from the MTD project say they have been “listening to concerns” of companies with complex VAT filing arrangements, and wanted “to ensure sufficient time for testing the service with them in the pilot before they are required to join.”An email from Anna Thomas and Clare Sheehan, Deputy MTD Directors, said: “We have since undertaken a detailed exercise to identify all customers that fall within this group, and will shortly start issuing letters to every customer affected.”Resources redirected to BrexitIt has also emerged that HMRC has decided to switch some IT staff from Making Tax Digital to projects supporting Brexit.This will not impact the timetable for MTDfV, but it will slow down preparations for future rollout of MTD to include corporate taxation.The Government’s position on MTDfb is that it will not happen until April 2020 at the earliest. However, with the growing turbulence from Brexit, there is speculation that it is unlikely to happen before 2021.Tough choicesNews of the reallocation of resources came in an email from Theresa Middleton, Director, Making Tax Digital for Business Programme:“HMRC have had to make some tough choices about how we use our resources so we can be sure of delivering on our EU Exit responsibilities.“We’re now at the point where we need to step up our internal preparations to make sure we’re ready for next March. In practical terms, that means putting skilled project teams onto this work straight away.”MTDfv full steam aheadThere will be minor changes to the delivery of certain aspects of MTD. But HMRC and ministers remain steadfast to their commitment to an April 2019 delivery of VAT mandation.Middleton wrote:“These changes do not impact our plans for VAT – the majority of customers with turnover above the VAT threshold will still be mandated to use the MTD for VAT service from April 2019 – and the continued prioritisation of the majority of MTD delivery in these challenging circumstance reflects the importance we and Ministers attach to it.”AAT responseAAT’s tax and policy advisor Brian Palmer commented:“VAT-registered organisations and their advisers be clear about the government’s commitment to carry on with the delivery of VAT mandation from April 2019.“While the complete rollout of MTD for business (MTDfb) might have slowed once again, I would encourage HMRC to seize the opportunity of a longer delivery window to redouble their efforts, and work even more closely with accountancy bodies and software for Income Tax and Corporation Tax to meet the challenges of delivering on all aspects of MTD for all interested parties.”Summary of the positionMTDfV will go ahead in April 2019, with exceptions for a ‘small number’ of businessesHMRC will be slowing their plans to widen MTDfb beyond the circa one million self-employed and unincorporated landlords, with simple tax affairs, who are already eligible to join.The slowing of the MTDfb delivery timetable will afford the department more time to work with developers on meeting the more challenging requirements of delivering MTD for complex business.There is unlikely to be significant change in the make-up of the MTD support teams.What has changed is that other digital delivery staff within HMRC are being redeployed to focus on ensuring that a customs solution will be in place if required next March. The content team are the owners of AAT Comment.