The first compulsory step in the Making Tax Digital (MTD) process starts next April, when VAT-registered businesses with annual turnover over £85,000 will have to keep digital VAT records.

A year later, all VAT-registered businesses will have to comply with MTD, regardless of turnover. HMRC eventually wants businesses to be filing digital records each quarter for income tax, and this could be rolled out as soon as April 2020.

The entire process is extremely daunting for many small businesses, including farmers. It brings back memories of the Single Application Form (SAF) going online for all NI farmers in 2017.

Most would agree that the online SAF has been beneficial, with errors spotted immediately and applications processed faster. MTD could bring similar benefits, and should mean that businesses have up-to-date information on their finances and tax situation.

However, the online SAF had more guidance, was phased in gradually and was available free of charge. In contrast, most farmers are unprepared for MTD and some local accountants estimate that it will cost an average farmer £300-£500 each year.

HMRC did not make its own MTD computer software and instead left it up to private firms. However, a recent House of Lords’ inquiry found that the MTD software market has not developed as expected and there is no evidence that free software packages are available.

It is simply not acceptable that farmers will have additional costs forced on them through either purchasing MTD software, or paying higher fees to accountants, to allow them to claim VAT back and pay income tax.

A free and easy-to-use MTD programme should be made available by HMRC for small businesses, and its initial roll out should be voluntary to allow issues to be addressed before compulsory compliance is introduced further down the line.

With Brexit coming down the track, there could be enough uncertainty and confusion next spring. Local political pressure needs to be put on HMRC to shelve all plans for MTD until well after 1 April 2019.

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