That’s according to the Northern Ireland Tax Committee in its response to the consultation “Draft legislation: The Value Added Tax (Amendment) Regulations 2018”. The Committee also advocates a longer soft landing period of at least 24 months to allow businesses, in certain circumstances, extra time to update legacy systems to be fully compliant.

The Committee also points out that recent research published by Ipsos Mori in December 2017, “Making Tax Digital for Business: Survey of Small Business and Landlords”, found very low awareness of the MTD requirements among small businesses and landlords.

According to the research, the use of software for taxes is low and many businesses will need convincing of the benefits of using software over their current practices; as well as support to choose and use software. Businesses and landlords are also concerned about the security aspect of keeping records digitally. With Making Tax Digital (“MTD”) for VAT due to commence in just over a year, this is very concerning.

The start date of MTD for VAT comes just days after the UK will leave the European Union. Already, businesses and their agents are experiencing severe pressure on their time and resources given the particular challenges that Brexit issues, such as customs regulations bring.

Overall, the Committee makes three key recommendations which would be helpful to businesses and their agents as we move towards MTD for VAT from 1 April 2019:

• The draft regulations should be amended so that MTD for VAT applies for any VAT stagger periods which fall into a business’s first accounting period beginning on or after 1 April 2019;
• The soft landing period should be at least 24 months; and
• The VAT registration threshold in the draft regulations should be fixed at the current rate of £85,000.

You can read the Northern Ireland Tax Committee response on here.