Plans which would have forced millions of businesses and self-employed people to file multiple tax returns each year have been shelved by the Government.
The policy, known as “Making Tax Digital” has been dropped from the Finance Bill.
The decision means that the scheme, which would have affected large businesses from 2018 and small businesses from 2019, will be delayed by at least a year.
It also raises the possibility that it could be scrapped altogether.
Worst-hit by the change would be the self-employed with turnovers of more than £85,000, who from April 2018 would have had to file at least five returns per tax year in addition to regular VAT returns.
In what has been described as a 'complex' scheme, farming unions have said the plans would require access to digital infrastructure that is not available in many rural areas, as 5% of the population does not have adequate access to broadband – many of those people are farmers.
'Welcomed' decision
Farmers' Union of Wales (FUW) President Glyn Roberts said the farming community have welcomed the decision.
“We very much welcome that this scheme has been dropped from the Finance Bill and urge the Government to not just delay its implementation but to scrap it completely.
“Across the country millions of individuals and businesses are benefiting from the convenience and simplicity of digital services and whilst this move would have brought benefits to some, there is a real concern that those in rural Wales, who have no access to internet, would be at a severe disadvantage.
“Whilst this proposal to bring business tax into the digital age is admirable, many people who live in rural areas are still waiting for the digital age to come to them. Those without a connection cannot diversify their businesses, that they cannot support children with homework as many need to do and that they cannot connect readily with Government programmes for advice and support payments as they are mandated to do.
“Government talks about ‘future proofing’ our economy in light of Brexit and investment in broadband should therefore be a top priority for the Welsh administration, given the wider economic benefits it will bring to our rural communities.”
