Significant number of small businesses ‘unaware of Making Tax Digital requirements’
A survey carried out by market research organisation Ipsos Mori on behalf of HMRC has suggested that a significant number of UK small businesses are ‘unaware’ of the forthcoming Making Tax Digital (MTD) requirements.
From 1 April 2019, MTD for VAT is set to come into effect for businesses with a turnover above the VAT threshold of £85,000. Firms will be required to keep digital records for VAT purposes, and provide their VAT return information to HMRC using MTD-compatible software.
The survey found that 70% of small businesses and landlords are ‘unaware’ of what will be required of them under MTD, whilst a further 40% of respondents asked for guidance on how to prepare for the introduction of the new digital tax initiative.
In addition, a third of survey respondents said that they believe that completing and filing quarterly digital tax returns will be problematic.
Commenting on HMRC’s findings, Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), stated: ‘This new report highlights how much work is needed to enable the small business community to reap the benefits of digital tax reporting. We know a lack of digital skills within small firms is proving a barrier to growth across the UK – it could also threaten the successful take-up of MTD.
‘The fact that so many firms don’t even know MTD is on the way is a real concern. Clearly, there needs to be a big push to get the message out there.’