Rural businesses encouraged to plan ahead for new digital tax legislation
Chartered accountancy firm Simpkins Edwards is advising its farming and rural business clients to plan ahead to ensure they’re ready for the roll-out of the Government’s ‘Making Tax Digital’ scheme, which begins next year. Making Tax Digital is a scheme that was set out by the Government in the spring of 2015, under which HMRC will introduce measures to improve the ease and efficiency of the tax system by moving it online. Under new legislation, businesses with turnovers in excess of £10,000 will be required to submit annual accounts digitally by spring 2018. This includes individuals with two businesses, for example earning £6,000 from renting a house out and £5,000 from an agricultural holding. Furthermore, there’s a commitment to putting the tax system entirely online by 2020 to reduce form filling, improve real-time operations and improve access. This is due to be done in stages, staggered for different businesses.
Julie Rose, branch manager at Simpkins Edwards’ Heathfield office, commented: “The changes are designed to help us all be more efficient in the long run, but in the short term they could cause teething problems for people who don’t currently use online systems.
“In particular, rural businesses need to consider their broadband access. An unreliable or slow connection could be a costly problem if deadlines are missed or information is missing. We’d advise anyone with broadband problems to speak to your provider as soon as possible to ascertain when improvements are due. If it’s still looking uncertain you will need to make alternative arrangements.”
Mary Jane Campbell, Partner and head of Simpkins Edwards’ agricultural and rural business team added: “The Government will provide free-at-the-point-of-use software in order to facilitate the new system but its sophistication is unknown and businesses may wish to consider using third party software, already available via accountancy practices, which means they can iron out any teething problems before the legislation comes in.
“It has been proposed, but not yet confirmed, that the Government will provide financial aid to businesses during the digital transition and we’re keeping a keen eye on this proposition and any other updates to the scheme on behalf of our clients. There are still lots of unknowns but this is a case where it will definitely pay to be as prepared as possible.”