Following a joint consultation response on the draft legislation, the NFU, NFU Cymru, NFU Scotland and the Ulster Farmers’ Union fear the scheduled scheme will be inaccessible for many farm businesses and difficult to implement properly.
Making Tax Digital requires access to digital infrastructure that is not available in many rural areas. Some 5% of the population does not have adequate access to broadband – and many of those people are farmers.
The four UK farming 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. In addition to this, there is a lack of suitable and registered software that is compliant with the proposed measures.
Farming’s seasonality compounds this, meaning that quarterly tax returns provide little benefit to HMRC or farmers.
NFU President Meurig Raymond said: “Together we are calling for the government to delay implementation farmers and to align its introduction with larger partnerships and limited companies.
“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.
“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.
“In its announcement, the government indicates that the implementation of Making Tax Digital would be delayed until 2019 for small businesses. Despite this, the practical implications have not been properly assessed. 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.”