HM Revenue & Customs (HMRC) has expanded the pilot programme for Making Tax Digital (MTD) VAT scheme to farm businesses that are set up in partnerships so that they join the sole traders and companies that have been able to participate since October last year.
MTD for VAT is due to be mandated with effect from April 2019 for businesses with a VAT turnover of at least £85,000. The initiative is designed to ensure that the UK tax system is effective and efficient and forms part of HMRC’s plans to make the UK one of the most digitally advanced tax administrations in the world.
A voluntary pilot scheme is underway but there will only be limited opportunities for farm businesses to join as it cannot currently accept repayment cases. According to the National Farmers’ Union (NFU), digital accounting records can provide farm businesses with easy and fast access to data and reports which can be extremely useful.
For many farmers, the introduction of MTD will signify the end of paper-based accounting systems, and those using electronic spreadsheets will need to invest in specialist accounting software or bridging software capable of sending and receiving data from the HMRC website.
However, farm businesses that have already been granted an exemption from having to submit their VAT figures online can continue to do so.