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The extension of the Making Tax Digital (MTD) process to include income and corporation taxes is being postponed, although government still intend pressing ahead with a new digital VAT system next year, the Irish Farmers Journal has learned.
An official start date for compulsory digital filing of income tax records every quarter has not been announced, although it was widely suggested that it could begin in April 2020.
This has now been postponed, with a HMRC spokesperson confirming on Wednesday that resources were being put into “a number of other projects”, which are understood to mainly relate to Brexit.
However, there appears to be no deferral of MTD for VAT, which will require businesses with annual turnover over £85,000 to keep digital VAT records from April 2019.
Lobbied
HMRC continues to be lobbied by various farmer organisations and business groups to delay the roll out of MTD.
“The NFU (National Farmers’ Union) has always argued against a mandatory approach and that a voluntary approach is the way forward,” NFU head of tax, Michael Parker, has said.
Last month, a House of Lords’ committee recommended that MTD for VAT is deferred by at least one year, and is not introduced for other taxes until April 2022 at the earliest.
Along with other farmer organisations, the NFU has written to the chair of the House of Commons’ Treasury Select Committee to ask for the issue of MTD for VAT to be raised with Treasury Ministers.
“The NFU still believes many farm businesses will need more time,” Parker maintained.
On enquiry, a HMRC spokesperson said: “We are always listening to feedback from our stakeholders, though there is no plan to delay MTD for VAT.”
Exemptions
The HMRC spokesperson also confirmed that exemptions to MTD will be based on the same criteria which allowed some businesses to opt out of submitting online VAT returns when it became compulsory in April 2012.
“The exemption rules under MTD mirror the existing VAT online filing exemptions. There is no need to reapply for an exemption for MTD,” the spokesperson said.
The criteria which allow a business to be exempt from online VAT returns includes factors such as age, disability and internet access.
However, with most farm businesses having some form of access to the internet, receiving approval for an exemption to MTD could prove difficult, especially if exclusion from submitting online VAT returns was not granted back in 2012.
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