A new survey commissioned by Intuit QuickBooks, has revealed 11% of business owners are still in the dark about new rules on digital tax records.
During the first phase of HM Revenue and Customs’ (HMRC) new digital tax system, Making Tax Digital (MTD), over one million firms with annual taxable incomes above the £85,000 VAT threshold are now legally required to file digital VAT returns as of 1st April 2019.
However, this report underlines that a growing number of small businesses are unsure of their compliance with MTD. Almost half (46%) of all small firms polled who thought they complied with the new scheme did not yet meet the necessary requirements.
Furthermore, a quarter of small businesses that were deemed MTD-compliant felt they had not adequately prepared for the new digital tax system.
HMRC has moved to reassure small business owners who are doing their best to comply by insisting a “light touch” approach to non-compliance penalties will be adopted during the first 12 months of MTD for VAT’s implementation.
Chris Evans, Vice President and Country Manager, Intuit QuickBooks UK, says small business owners should look to use the firm’s free tool to find out whether their business is truly ready for MTD for VAT.
“Our findings show that there are still quite a large number of businesses which could be caught out by the changes,” said Evans.
“So we’d advise them to read up on Making Tax Digital or try our free MTD Checker tool, because there is nothing to be worried about.
“MTD is a huge opportunity to navigate digital adoption, to streamline operations, motor efficiencies and simplify tax.
“By backing small business owners through the transition of MTD we can help accelerate cash flow management and allow them to get paid faster and run their companies more effectively.”
Of those small businesses already taking part in MTD for VAT, 42% of those surveyed said achieving MTD compliance was quicker than anticipated. Only 13% said that achieving MTD compliance took longer than expected.
We can work with you to understand exactly what is required to manage your VAT records digitally.
We have invested a great deal of time developing the right support services to guide small business owners through this period of change.