Business owners across Britain from the start of April must file VAT returns online using government-approved software. It is the first phase in the flagship Making Tax Digital policy — and has been beset by delays and complications.
Small business bosses say the new requirements, which apply (with some exceptions) to those with a turnover above £85,000, coincide with an unprecedented cocktail of cost pressures. A hike in the national living wage and an increase in employer contributions to auto-enrolment pensions also start in the first week of April.
The measures all come into force days after Britain is due to leave the EU — and Brexit heaps further uncertainty on the future of companies, forcing entrepreneurs to change how they keep tax records feels to many like another unnecessary obstacle put in their way by the government.
“It was not supposed to be like this. Making Tax Digital was hailed as a revolution in the tax system when it was unveiled four years ago by George Osborne, then chancellor, but the programme has struggled to live up to its billing. Plans to have all individual and business tax returns submitted digitally by 2020 were scrapped last year, with officials admitting their targets had been too ambitious.