Making Tax Digital will affect millions of small businesses from April this year but the latest data suggests more than half of all UK SMEs still don't understand what's in store.
A new survey by online accountancy firm Mazuma Accountants has found that many small businesses are still in the dark when it comes to Making Tax Digital (MTD).
From April 2019, all VAT-registered businesses in the UK will have to submit their VAT returns digitally using an approved app. According to an ONS survey in March 2018, 2.67 million businesses are registered for VAT and/or PAYE.
However, with three months to go, the research shows that there is still a mountain to climb to prepare UK small firms for these changes.
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The findings show that:
- 54% of business owners say they don't know much about what Making Tax Digital is;
- 69% have not been informed of the forthcoming changes by their accountant;
- 84% of those polled have yet to receive any correspondence from HMRC regarding MTD;
- 51% of business owners and traders say they are worried about how the changes will affect their business.
The new VAT requirements this year are just the start; from April 2020, Making Tax Digital will be rolled out to include income and corporation tax.
"These results are really worrying as they show that accountants across the UK haven't properly prepared their clients for the tax changes coming in April 2019," said Lucy Cohen, managing director at Mazuma Accountants.