Last Orders

We have written about the Making Tax Digital (MTD) regime in almost every recent edition of this newsletter, and the last one included a ‘final reminder’!

Some VAT-registered farms have delayed acting because of low transaction volumes and values, and concern to avoid the ongoing extra cost of a cloud software subscription. According to HMRC, those businesses will be blocked from submitting VAT returns for periods commencing on/after 1 April 2022 if they do not become MTD compliant. 

For most farming sole trades and partnerships, we recommend moving to cloud accounting software now. 

Bridging Software

For the smallest VAT-registered farms (e.g. where turnover is under £10,000 or likely to fall under that figure in the next few years), MTD compliance could instead be achieved by keeping the records on Excel spreadsheets and using special ‘bridging software’ to link each quarter’s spreadsheet to HMRC’s system. 

Bridging software is lower cost than cloud accounting software (sometimes free) and there are many MHRC-approved providers (see HERE). One example is VitalTax, whose website has a useful demo that is worth viewing even if you subsequently choose a different solution. 

Exemption

It is also possible t seek HMRC’s permission to be exempted from the MTD VAT regime on grounds that it is ‘not reasonable or practical for you to use computers, software or the internet to follow the rules for Making Tax Digital for VAT’. Details of how to opt out are available HERE.  

With most farmers already using computers for grant applications and/or livestock registrations, few VAT-registered farms are likely to qualify for exemption and we do not recommend applying if the MTD requirements can reasonably be met (e.g. with the assistance of a family member or bookkeeper). However, there are circumstances where exemption may be appropriate – e.g. elderly farmers who are not computer literate and who have neither internet access nor help available. 

As ever, trying to beat the system by ignoring it is unlikely to succeed. Please speak to us now if you need help. 

We can provide CCH’s OneClick bridging software to clients who are registered users of our secure portal facility – completely free of charge. 

Please speak to us if you would like this arranged.