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Livestock & Feed
Livestock & Feed
Making Tax Digital – take control and reduce the burden
18 September, 2018
Making Tax Digital (MTD) for VAT is HMRC’s flagship program to ‘digitise VAT’. It means that from April 2019, businesses with a turnover of more than £85,000 will have to submit their VAT returns through compatible accounts software.
For the estimated 75% of farm businesses who are keeping manual records, this will mean investing in new software. Below, Chartered accountant Anne Cianchi, Making Tax Digital project consultant for our approved supplier Farmplan, highlights four key facts businesses need to be aware of:
1. There will no longer be the option to use a paper-based recordkeeping system to calculate the amount of VAT owed before submitting a paper return or manually entering calculations on the HMRC website.
2. Farms using electronic spreadsheets, such as Microsoft Excel, will also have to invest in specialist accounting software or bridging software (a tool to transfer data from one place to another) as, after the change, they will be the only products capable of sending and receiving data from the website.
3. HMRC has made it clear it will not be providing free software for users to make VAT submissions.
4. Only one submission will be allowed for each individual VAT registration number. This means companies that keep multiple sets of accounts for different businesses – for example, a farm and a diversification enterprise – will need to combine them into one figure for their VAT return. Farmers and bookkeepers should be aware that not all software has this capability.
In order to support the farming community through this transitional phase, we are pleased to supply our members with compatible and compliant software Cash Focus from Farmplan. Cash Focus enables farmers to stay compliant with the new VAT regulations, without the added complexity which can make other packages difficult to use.
Though some businesses will inevitably be forced to invest in software in order to remain compliant, there can be additional benefits such as financial savings and improvements in efficiency, making this more of an opportunity than an imposition.
Suzanna Gascoigne, who manages accounts for Holkham Farming Company and recently switched to Farmplan from Sage – the industry leader – agreed that this switch has not only reduced her workload, but also enabled her to carry out in-depth analysis on the financial performance of on-farm enterprises.
It may be tempting to hold off purchasing software until nearer the deadline, especially given the pace and pressures of farming. However, given the costs and limitations of some of the accounts packages currently on the market, it is important that we take the time to research the options available to you and offer the most appropriate. By working with our partner suppliers, we can deliver the best software solutions for your farming business at competitive prices.
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<div style="text-align:center"><h3>Making Tax Digital for VAT</h3><a href="https://www.theafgroup.co.uk/blog/making-tax-digital-take-control-and-reduce-the-burden"><img src="https://www.theafgroup.co.uk/shares/shutterstock_499441339.jpg" style="width:500px; max-width:100%; margin:15px;border:0;"/></a><br><br><br><a href="https://www.theafgroup.co.uk/blog/making-tax-digital-take-control-and-reduce-the-burden">https://www.theafgroup.co.uk/blog/making-tax-digital-take-control-and-reduce-the-burden</a><div>Businesses need to be aware of upcoming changes to digitise VAT. We look at four key facts.</div></div>
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