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