The move to Making Tax Digital for VAT (MTDV) has proved to be a testing time for those in business as they face up to taxation in a digital age. However, recent survey findings suggest that farming businesses are less equipped for change than urban or city-based enterprises.
Research carried out in the weeks leading up to the introduction of MTDV reported that 20% of farmers in the UK did not know what MTDV was and that 44% had not even considered what the change would mean for their business.
We’ve helped our clients in all sectors make the move to MTD, but many of our agriculture clients are finding the prerequisite of having online access a major concern. Internet accessibility – almost invariably a given for urban businesses – can pose challenges for those living and working in remote areas.
Some premises have limited broadband access, if any at all in some of the most rural and remote parts of north east Scotland. In light of this challenge, HMRC has indicated a potential exemption on the grounds of digital exclusion. Another possible solution is opting for a desktop-based software.
However, offline software still doesn’t preclude another major challenge: digital illiteracy. As farmers traditionally tend to have a higher age demographic, research suggests that this increases the probability of cases of less technologically literate business owners.
The compulsory change that MTDV brings with it will understandably be a concern for many agricultural businesses. However, farmers can take this as an opportunity to streamline their business as there will be real benefits of migrating to a digital platform.
Reporting accounts will become more efficient and accurate, allowing farmers to view their accounts in real-time for better analysis of profit estimations and cashflow. All this helps to make more informed business decisions.
With a long track record of working with those in the agricultural sector, our firm is fully prepared to guide our clients through their transition. We encourage our existing and potential farming clients to get in touch to discuss any queries relating to the move.
We’ll also be able to assist with a demonstration of the programme and what we will need, going forward, to file reports to ensure clients’ accounts are fully compliant with HMRC’s requirements.