Anyone who cannot find suitably accessible software to comply with the Making Tax Digital for VAT rules should apply to HMRC for a temporary exemption, for example for age or disability reasons, says the Low Incomes Tax Reform Group (LITRG)
Changes to VAT reporting mean that anyone registered for VAT above the £85,000 threshold has to keep digital VAT record and report via commercial software, rather than using the old nine-box online reporting method.
HMRC is not providing in-house software for Making Tax Digital for VAT and is pushing taxpayers to buy commercial software. However, there are still very few packages available for taxpayers who have accessibility needs.
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.
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 continues to add software products to their software choices database as more come to market, including those which meet the necessary accessibility criteria. Taxpayers will need to check HMRC’s software choices tool regularly to see whether any new software is available that may meet their 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.
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, they are not covered accurately on the main HMRC website pages and no link is provided from those pages to the technical guidance, says LITRG.
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.’
Report by Sara White
Further reading
HMRC sets out exemption process for Making Tax Digital for VAT
HMRC MTD Guidance, para 3, Exemption from Making Tax Digital