Over half of business owners don’t understand the HMRC initiative Making Tax Digital, according to research from Mazuma Accountants.
The survey has revealed that over half of business owners lack knowledge about what Making Tax Digital (MTD) is, with many more failing to be made aware by their accountant.
Making Tax Digital is set to launch in April 2019, and is compulsory for VAT registered companies that are above the turnover threshold of £85k. Despite the importance of the change, few business owners know how it will affect them, with 54 per cent stating that they don’t know much about what MTD actually is and 69 per cent not having been informed of the forthcoming changes by their accountant. A shocking 84 per cent of those surveyed have yet to receive any correspondence from HMRC regarding the scheme’s implementation.
Making Tax Digital is designed to make the UK tax system run more effectively for tax payers. From 1 April 2019, it requires VAT registered businesses above the threshold of £85k to keep digital records and submit VAT returns using compatible accounting software.
Future implementation of MTD, including for those who pay income and corporation tax, has been placed on hold until April 2020. It’s a key government initiative in a bid to cut down on fraudulent behaviour as well as make filing a tax return simpler for most businesses.
Will MTD affect you? Do you feel prepared? Let us know on firstname.lastname@example.org.