Making VAT Digital Is Coming
Farms businesses are left with just over 14 months to get themselves ready for new VAT rules, requiring them to keep digital records.
Last year the Government decided to delay plans for introducing Making Tax Digital (MTD) for income tax until at least April 2020, to give businesses time to prepare and adapt for the changes.
However, HMRC are pushing ahead with plans for Making VAT Digital (MVD) and plan to introduce the changes from April 2019 for any business over the VAT threshold of £85,000.
NFU are particularly concerned with the changes, which mean farmers will need to make sure they have access to software compatible with HMRC’s systems.
Many rural areas are struggling with upload speeds of less than 2mbs. Michael Parker, Head of Tax for NFU, said:
“It is suggested by the Government that Making Tax Digital proposals will bring business tax into the digital age. However for many of our members, the digital age has yet to be delivered to them by the Government.”
There are also concerns over the complex nature of farm accounting and taxation and fears the tailored software may not be available in time.
Also, consideration has to be given to the UK’s planned exit from the EU, which could result in further changes to the VAT system.