The Government has decided to start phasing in changes forcing businesses to submit tax information online from April 2018, prompting the CLA to call for consultation with rural businesses on the timeline of the plan.
The switch to digital tax accounting presents serious issues for farmers with poor broadband access and the timeline has already been branded ‘wholly unrealistic’ by MPs on the Treasury Select Committee.
HMRC has also had to fend off accusations of ‘exploitation’ from Labour peer Denise Kingsmill as it became clear businesses with more complex tax affairs – such as farming enterprises – would have to pay for software to comply with the new scheme.
CLA president Ross Murray said: “We raised concerns over the way the project might be rolled out as it would be difficult for businesses in the countryside without fast and reliable broadband to comply by the 2018 start date. The Government must reassure businesses they will not be unfairly penalised as a result of poor connectivity when trying to complete and submit tax information online.
“Consulting with rural businesses on the timescale and cost implications of the project if the free software is not suitable for farm businesses or partnerships, and implementing in phases will help the Government ensure tax compliance is achieved and avoid throwing the rural economy into chaos.”
The Government has estimated it will cost businesses an average of £280 to switch to the new system.