Almost half of small business owners in the UK have still not heard about Making Tax Digital according to new research released by software provider Intuit QuickBooks.
From April 2019, VAT-registered businesses with a turnover of £85,000 will have to maintain a digital record of their VAT transactions and submit their VAT returns using software that is compliant with HM Revenue & Customs’ Making Tax Digital (MTD) project.
But a survey conducted by QuickBooks revealed that 41% of small business owners were still unaware of Making Tax Digital, and although 22% were aware of what it is, they are only planning to file their taxes digitally if they face financial penalties.
Understanding the legislation has proven to be a major challenge for 76% of those quizzed, followed closely by finding new tools to help them comply (70%), having time (66%), coping with more work (64%) and picking the right cloud-based software (63%).
Almost half of (42%) of those who took part in the survey said they rely on their accountant for information about taxes and managing business finances. Of those who do use an accountant, 80% depend on them to calculate their taxes, suggesting accountants may play a key role in easing any concern, confusion or misinformation about MTD among small business owners.
In the QuickBooks survey, accountants stated that client education was their main concern in the run up to MTD (29%), followed by making their own practice ready to comply with MTD (27%), and training clients how to use online software (27%).
MTD is part of HMRC’s plans to make the UK one of the most digitally advanced tax administrations in the world. Also referred to as Making Tax Digital for Business (MTDfB), it applies to the self-employed and landlords who pay Income Tax on their profits, entities who are registered for Value Added Tax (VAT) and companies that pay Corporation Tax (CT) on their trading profits.
Your local TaxAssist Accountant can help
If you’re worried about meeting your Making Tax Digital obligations, why not arrange a free consultation with your nearest TaxAssist Accountant? Our partnership with Intuit QuickBooks removes the stress of managing your business accounts and allows you to focus on doing what you do best – growing your business.