ICAEW: SMEs need help to avoid digital exclusion
26th October 2016 | News
New research from the Institute of Chartered Accountants in England and Wales (ICAEW) states smaller firms require greater support to ensure government plans to digitalise business transactions come to universal fruition.
Prior to the consultation deadline for Making Tax Digital, the ICAEW has compared the success and failure of global attempts to digitalise tax in report ‘Digitalisation of Tax, International Perspectives’.
David Lyford-Smith, technical manager, ICAEW, said: “There must be an avenue for those who cannot comply with digital reporting to avoid penalties; this may be through traditional paper-based record keeping or via supporting a network of accessible and affordable tax agents.”
The report states the “largest and most persistent” issue is digital exclusion for SMEs. More importantly, it believes that while the Government will be able to further educate small business owners and provide them with better resources, “total compliance is impossible”.
In other nations where tax has already been digitalised, “we should look at examples to see universal impact”, said Lyford-Smith.
“Estonia’s digital transformation is one of the leading examples and yet there is digital exclusion as in remote areas internet connectivity is poor.”
Securing universal adoption of digital payments among British businesses looks like being anything but straightforward with an ICAEW survey earlier this year indicating only 25 per cent of businesses maintain electronic accounting records.
“So there is a huge amount to be done by businesses, HMRC and the software industry in a very little time,” added Lyford-Smith.
“We believe the move to digital should not be made compulsory and instead should be a matter of choice for business owners.”