A report commissioned by HM Revenue & Customs (HMRC) reveals widespread ignorance among small and medium sized (SMEs) about Government’s upcoming ‘Making Tax Digital’ (MTD) proposals which will encourage digital record-keeping.
Seven in ten small businesses and landlords are not aware of the impending changes, which will oblige them to digitise their tax records and update HMRC four times a year. The proposals affect an estimated 1.6 million companies, 2.4 millon self-employed people and 900,000 residential landlords, and the Association of Taxation Technicians has described the apparent lack of awareness as a “serious problem”.
Another survey by market research organisation, Ipsos Mori, of 2,900 businesses and landlords also found a willingness to comply with the requirements among 70 per cent of respondents. One in four firms said they would only comply under the threat of fines, and a third said they expect complying to be difficult.
The ‘Making Tax Digital’ initiative, which is aimed at making tax payments more efficient by replacing the annual tax return with digital record-keeping and quarterly updates, has been delayed to 2020 at the earliest for taxes other than VAT.
For more information about how the changes could affect you and your business, speak to a member of our Beavis Morgan team who will be able to review and advise on your position. We are also available to assist with all the necessary returns when they are fully introduced. Contact Alan Ford or your usual Beavis Morgan Partner.