Over 300,000 businesses wrongly believe they are MTD compliant
Research by QuickBooks has found that over 300,000 small businesses could be caught out by MTD, as they wrongly believe they are MTD compliant
Approximately 346,000 small businesses are in danger of being caught out by MTD after mistakenly believing they are MTD compliant when in fact they are not, according to research.
The research commissioned by QuickBooks also found that 89% of businesses had heard of MTD, two-thirds believed they were compliant, but 46% wrongly believed they were compliant.
The confusion, according to Chris Evans VP and country manager at QuickBooks, was due to firms that were already operating digitally, so believed there was nothing more to do. QuickBooks are launching an MTD checker so businesses can ensure they are compliant.
“Some businesses who already keep digital records, but only submit their VAT returns through their existing Government Gateway account, think they are already MTD compliant,” he said. “When in fact, it will no longer be acceptable for them to file future VAT returns via the government gateway. Instead, they will need to use MTD-compatible software capable of securely transmitting data to, and receiving it from, HMRC without the need to manually type data on to a portal screen.”
“Another reason for lack of MTD compliance at this stage could be that businesses already have the appropriate software in place, and simply have not realised they need to sign up for Making Tax Digital through their business tax account or simply they just haven’t gotten around to it yet,” Evans added.
SMEs needed to be more open to technology and they would soon see the benefits said Evans.
“It is not uncommon for firms to be resistant to change. Therefore, they can be slow to adopt new ways of working, particularly when it comes to tax compliance,” Evans said.
“This is certainly what we have found when it comes to MTD. Where there is no doubt that for some, achieving compliance marks a step change; we are confident that once they have made the change there are also countless advantages to making the move to digital record keeping, including access to near limitless reporting functionality giving a real-time view of financial health.”