Smaller businesses don’t believe that Making Tax Digital (MTD) applies to them, according to a study carried out by Yonder Consulting for HMRC.
While businesses indicated they were aware of MTD for VAT, many still do not understand the process of the scheme and whether their business needs to comply with the rules.
In a second survey, 26% of businesses said they had not yet linked their MTD-compatible software with HMRC’s systems, misunderstanding a fundamental part of the Government’s flagship policy for tax digitisation.
Although all businesses polled are required to use MTD-compatible software, the results vary:
● 36% said MTD would affect their business
● 29% said they were compliant
● 28% believed MTD would not affect their business
● 7% did not know whether they would be affected or not.
A high number of businesses were found to not have invested in software yet. When asked about their preparations:
● 48% had discussed the changes with their accountant
● 17% had purchased a software package
● 54% of firms said they have researched MTD software
● 48% had started keeping digital records.
On the specific requirements for MTD, only 51% of businesses were able to remember a single one, while 12% answered incorrectly and 37% could not think of any requirements.
Contact us to learn more about MTD.
