According to recent research, many businesses in the UK are unprepared for the April 1 deadline for Making Tax Digital (MTD), while of those who know about it, 64 per cent say they need more support.
As of 1 April, most businesses that are registered for VAT above the £85,000 threshold will have to keep their records digitally and to submit their VAT return using software that is compatible with HM Revenue & Customs’ (HMRC) software.
The research found that 5 per cent of those polled believed MTD could be damaging to their business, 19 per cent felt it would offer their business no benefits, while 12 per cent said they were ready. Meanwhile, the remaining 64 per cent said they thought it was a good idea but that they need more support during its implementation.
MTD is a key part of the Government’s plans to make the UK the most digitally advanced tax administration in the world so, contrary to some rumours, its implementation will not be delayed.
It is, therefore, a concern to see that with just over a month to go until the deadline, almost two-thirds of businesses say they need more support and are still working out what they need to do to get ready.
MTD will herald change, as although 98 per cent of VAT-registered businesses already file VAT returns electronically, MTD will involve significant changes to their existing processes. These will include keeping digital records, maintaining a digital audit trail of all business transactions and implementing new software to submit their VAT returns annually.
Julian Borley, Director of VAT at Milsted Langdon said: “It is concerning to see that so many firms are unprepared for MTD.
“If you are unprepared and would like more support on how making tax digital will affect your business after the deadline, please get in touch today and contact Milsted Langdon today.”