Digital tax scheme '˜ill considered' for farms

The UK’s four farming unions want Ministers to delay the new ‘Making Tax Digital’ scheme for farm businesses.

Following a joint consultation response on the Government’s draft legislation, the NFU, NFU Cymru, NFU Scotland and Ulster Farmers’ Union said they fear the scheduled implementation will be inaccessible for many farm businesses.

The scheme requires access to digital infrastructure that is not available in many rural areas. Five per cent of the population still does not have adequate access to broadband, with many of those people being farmers.

NFU president Meurig Raymond said: “The Government proposes that Making Tax Digital will bring business tax into the digital age but for many of our members the digital age has yet to be delivered to them by the Government.

“This fact, combined with overwhelming complexity, is why action is necessary. We have serious concerns for those farm businesses that will be among the first forced to comply with these changes and the issues this may bring, not to mention the potential costs involved.”

The Government has indicated that its digital scheme would not be implemented for small businesses until 2019, but even so, the unions claim the practical implications of the roll out lack proper assessment.

Mr Raymond said: “Government must be clearer on what information is required and that the system is sufficiently tested by farm business owners. There is insufficient time available for the industry and HMRC to achieve what is required for this to work.”

The unions believe that farmers will have considerable difficulty due to the complexity of modern farm businesses, two-thirds of which run diversified enterprises, requiring different accounting and tax adjustments and potentially separate income and expenditure reporting. They also bemoaned a lack of suitable software, saying farming’s seasonality compounds this, meaning quarterly tax returns provide little benefit to government.