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Making Tax Digital: Are you compliant?

Farmers should check to ensure their businesses fall within the Making Tax Digital remit. Alex Black asks NFU head of tax Michael Parker what you need to know.

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Making Tax Digital: Are you compliant?

Farm businesses needed to check if they were required to be compliant with Making Tax Digital (MTD) and figure out a way to do so, as the rollout looked to be going ahead as planned.

 

The NFU had objected to the speed of the rollout and had not wanted to see it made mandatory, with concerns about people’s ability to comply due to computer skills and poor rural broadband.

 

NFU head of tax Michael Parker said letters had started to land on the doorstep of those HMRC believed needed to be compliant, but farmers should check whether they actually fell under its remit.

 

Scope

Mr Parker said some things were outside the scope of VAT and would be exempt, which could affect whether a business crossed the £85,000 threshold.

 

“It is worth people going through it all, perhaps with their adviser,” he said.

 

“What I am finding is there are some who have reduced the level of farming activities and may be on the borderline.”

 

Some businesses may also believe they should be exempt but this would only be applicable in exceptional cases.


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“It is not just ‘I am so many years old, I have never used a computer and broadband is very poor’.”

 

He said businesses now needed to decide how they were going to remain compliant.

 

“Are they going to outsource it? Are they going to try a spreadsheet with bridging software? And I would say they should have that solution in place before they register, it is a sensible way to proceed,” said Mr Parker.

 

He said the best approach would depend on the business and the people involved.

 

“If you have an accountant, then discuss it with them. Perhaps think about what you are trying to achieve,” he said.

 

Mr Parker added there were opportunities for those who wanted to do more with data but others would just want to do what they had to.

 

He added businesses might want to look to the future and consider software which was applicable to the kind of business they were running and ready for future developments in MTD, such as income tax reporting.

 

Future

“A lot of people have diversified or have more than one trade,” said Mr Parker.

 

“Check whether the software keeps up with the type of business you are operating and if it can handle more than one enterprise.”

 

Originally, income tax reporting was planned to go digital from last April, but following consultations and feedback from those including the NFU, the Government opted to change VAT first with income tax to come in no earlier than 2020.

He added the Minister had made a statement of update to Parliament so it now seemed unlikely they would see any further concessions.

 

For those concerned they would not be able to make the switch, Mr Parker suggested contacting HMRC. NFU members could also contact NFU Callfirst.

 

He added people who were already using software should contact their software provider and check whether they needed to do any updates for the software to be compliant.

 

Telephone numbers

  • VAT general enquiries: 0300 200 3700
  • Callfirst: 0370 845 8458
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