Farmers among fastest to register as online VAT deadline looms

Farm businesses have been among the fastest to register ahead of a deadline for the HMRC’s Making Tax Digital (MTD) service, figures show.

The new online system applies to the 1.2m businesses with an annual turnover above £85,000 and which are therefore required to file quarterly VAT returns.

The rules apply to VAT periods from 1 April, which means businesses who file quarterly must submit returns using approved, MTD-compatible software by 7 August.

See also: Changes to submitting VAT in 2019: What you need to know

The HMRC has been pressing businesses to register before that date, adding that direct debit users must sign up earlier, by Monday 29 July.

As the deadline approaches, thousands of businesses have begun to act.

According to HMRC figures:

• About 10,000 businesses are registering for MTD every day.
• More than 600,000 businesses have signed up in total.
• More than 400,000 submissions have already been made.
• Businesses in the agriculture sector are among the fastest groups to sign up, with 50% already registered.
• The financial sector has been one of the slowest, with nearly 75% yet to register.

Theresa Middleton, director of Making Tax Digital at HMRC, said: “Now is the time for businesses with an August quarterly filing deadline to sign up and join the hundreds of thousands already experiencing the benefits of MTD.

“During this first year, we won’t be issuing filing or record-keeping penalties to businesses doing their best to comply,” Ms Middleton stressed.

HMRC expects the service to cut tax lost as a result of errors, thanks to the improved accuracy that digital records provide.

The latest tax gap figures showed avoidable mistakes cost taxpayers more than £9.9bn last year – £3bn attributable to VAT alone.