Anyone who cannot find suitably accessible software to comply with the new Making Tax Digital for VAT rules should apply to HMRC for a temporary exemption, says the Low Incomes Tax Reform Group (LITRG).
HMRC are not providing in-house software for Making Tax Digital for VAT. Instead, they are working with the software industry to bring products to market for all taxpayers, including those who have accessibility needs. Currently, there are only a handful of products which meet various accessibility needs according to HMRC’s software choices tool. Unavailability of suitable software products on the commercial market may constitute grounds for claiming a temporary exemption until such time as suitable software becomes available.
As part of Making Tax Digital, businesses registered for VAT with a taxable turnover above the VAT registration threshold of £85,000 must keep VAT records digitally and file their VAT returns using MTD compatible software.
Head of Team at LITRG Victoria Todd said:
“While more accessible software providers have recently been added to the GOV.UK website, we are disappointed that there is not more software available to meet various accessibility needs now that Making Tax Digital for VAT is mandatory. We urge those with accessibility needs who cannot find software that enables them to comply to contact the HMRC VAT helpline as soon as possible to request a temporary exemption.
“HMRC continue to add software products to their software choices database as more come to market, including those which meet the necessary accessibility criteria. You will need to check HMRC’s software choices tool regularly to see whether any new software is available that may meet your requirements.”
In the meantime, LITRG says taxpayers affected by this should continue to file their VAT returns and pay any VAT due as they were doing before the introduction of the new rules.
The Making Tax Digital for VAT rules allow those who have difficulty using digital tools due to age, disability, location or any other reason to apply for an exemption from the requirements. Although the exemptions are set out in full in HMRC’s detailed technical guidance,1 they are not covered accurately on the main GOV.UK website pages and no link is provided from those pages to the technical guidance, says LITRG.
Victoria Todd said:
“It is crucial that taxpayers have easy access to guidance about these exemptions so they can understand whether one of the exemptions might apply to their situation. It is not helpful for the full detail of the exemptions to be hidden away in technical guidance that is difficult for people to find. This should corrected by HMRC as a priority.”
Notes for editors
1. HMRC’s guidance can be found here.
2. A taxpayer’s full range of personal circumstances will be taken into account when HMRC consider an application for exemption and it is possible to appeal against their decision if you believe it to be wrong and you have suitable grounds for appeal.
3. The HMRC VAT Helpline can be found: 0300 200 3700.
4. Low Incomes Tax Reform Group
The LITRG is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.
The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. The CIOT’s 18,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.
Contact: Hamant Verma, External Relations Officer, 0207 340 2702 HVerma@ciot.org.uk
Out of hours contact: George Crozier, 07740 477 374)