As we know, the road to “Making Tax Digital” has not been a smooth one. Having originally been announced in 2015, implementation has been slow and start dates deferred but, from 1 April 2022, all businesses which are registered for VAT are making digital submissions and, from 6 April 2024, this will extend to landlords and businesses whose aggregate annual turnover exceeds £10,000.

In terms of public engagement, the feedback which HMRC has received is not wholly encouraging. On 27 May, they issued a paper on “customer readiness”. Over 2000 taxpayers were surveyed, of which 42% were felt to be “capable” (most of these were either young, computer literate and with turnover below the VAT limit, or larger businesses with an existing IT infrastructure). The majority of those surveyed were “capable but disengaged”, “cautious and lacking confidence” or “resistant and less capable”. Usage of paper-based systems was high in these groups with 41% to 76% using such systems.

There was some evidence within the comments from participants which suggested that, rather than comply, taxpayers would take early retirement or wind businesses down to below the £10,000 level. Circumstantial evidence suggests that this has already happened for some small VAT registered businesses.

The level of engagement is not likely to be improved by recent developments in the implementation process: it has now been confirmed that where there are multiple trades within a single business, quarterly and annual returns will be required for each trade. This will mean that where a farm has, in addition to the main farming trade, for example, rents, furnished holiday lets, a contracting business and a farm shop, five quarterly returns will be required. Moreover, some software providers will be unable to accommodate this within existing packages so multiple programmes may be required and possibly multiple bank accounts. One can understand why some businesses might look at partial incorporation for the subsidiary trades, purely from administrative convenience.

Finally, it has also been revealed that HMRC have structured “multiple agent access" so all agents can see everything on the agent account. This means a farm secretary who files the quarterly reports sees the whole story for the client as will an estate agent who does the rental quarterly reports. In the words of one practitioner “where is GDPR when you want it?”