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Beyond the balance sheet

Are you ready for Making Tax Digital in the farming industry?

Ben Brookes 06/9/2019 2 minute read

Ben Brookes takes a look at Making Tax Digital from the agricultural perspective and what the change will mean for farmers.

The world is in an interesting phase of embracing and going digital. More and more process driven tasks are either being performed using software or, are being implemented by these programs via automation. This is particularly relevant to farmers because of the government's push to end the traditional tax return system as we know it.

MTD is happening now! Contact your Wellers advisor today.

Although the government has already implemented an alternative tax return method in the form of Making Tax Digital (MTD) for certain industries like agriculture, all sectors and individuals who are required to submit self-assessments are being gradually introduced.

What MTD is and why it is relevant to you

HMRC have set up a new web based system that brings the tax information of all self employed individuals and businesses into one place of storage.

 

Organisations with a turnover above the VAT threshold (£85,000) are now required to:

  • Register
  • Update their information online
  • Submit their income and expenditure figures to quarterly deadlines
  • Pay any tax due based on the quarterly figures

 

MTD is particularly impacting farmers who used:

  • Manual bookkeeping processes – paper records
  • Customised Excel worksheets
  • Old desktop software that isn’t connected to the internet

The reason the government are doing this

MTD is the continuation of the mass adoption of online accounting software, by recording and paying your tax online on a regular basis. The goal is to simplify the process for clients and the Revenue. It means HMRC will be able to view and collect tax on a more real time basis compared to the current retrospective process of the tax return system.

When did MTD start?

The deadline for MTD was April 2019, which means all organisations that meet the requirements must follow the Making Tax Digital regulations and use MTD compliant systems.

What to do about it

Your transition to online accounting software has likely already begun, it’s time to ensure you record your transactions, submit your statement and pay the tax due digitally to stay compliant.

Yes MTD has started, but if you still find yourself with questions or are having issues with the process you can contact your Wellers advisor to ensure an ongoing smooth transition over to online, that doesn’t impact your daily work.

Uncertainties about Brexit have your concerned about your farm? Contact us  today.

The content of this post is up to date and relevant as at 06/09/2019.

Please be aware that information provided by this blog is subject to regular legal and regulatory change. We recommend that you do not take any information held within our website or guides (eBooks) as a definitive guide to the law on the relevant matter being discussed. We suggest your course of action should be to seek legal or professional advice where necessary rather than relying on the content supplied by the author(s) of this blog.

 

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