KPMG reveals that UK businesses are still unprepared for MTD deadline

KPMG reveals that UK businesses are still unprepared for MTD deadline

64% have revealed to the Big Four firm that, whilst MTD is a good idea, they do not feel supported

KPMG UK has today released new statistics that have highlighted that many UK businesses still feel unprepared for the Making Tax Digital (MTD) VAT deadline.

As KPMG has stated: “Making Tax Digital is a key part of the government’s plans to make it easier and more effective for individuals and businesses to get their tax right and keep on top of their affairs.” However, how effective has the implementation period been thus far? Delays, confusion, and misunderstandings have been consistently present since MTD has been introduced.

Perhaps the most concerning percentage that KPMG research has revealed is that 64% of the 1,000 UK businesses who took part in their survey admitted that MTD is “a good idea” but more support needs to be provided ahead of the April deadline.

As is well-known at this stage, from 1 April 2019, most VAT-registered businesses above the £85,000 threshold will have to keep digital records going forward, as well as submit their VAT returns using compatible software.

For a small percentage of UK businesses in this bracket, their more complex needs have meant that HMRC has extended their deadline until 1 October 2019.

“With just over a month to go until the deadline, it’s worrying to see that almost two-thirds of businesses [are saying] that they need more support and are still in the process of working out what they need to do,” said Chris Downing, tax partner at KPMG. “This could potentially be both costly and time-consuming, depending on the changes that need to be made.”

He continued: “Although 98% of VAT-registered businesses already file VAT returns electronically, MTD will involve significant changes to their existing processes. For example, keeping digital records, maintaining a digital audit trail of all business transactions, and implementing new software to submit their VAT returns annually.”

When conducting their research looking into “which statement best described their attitude” to MTD and the 2019 deadline to comply with the new VAT legislation, KPMG concluded the following:

  • 5%: it be damaging to their business.
  • 19%: it will offer their business no benefits.
  • 12%: are supportive and also ready for the deadline.
  • 64%: believe it is a good idea, but they need more support throughout the implementation process.

Downing concluded: “Once businesses have made those changes, then they also need to think about the flexibility of their systems and processes to meet potential future requirements under MTD. HMRC are seeking to become the most digitally advanced tax administration in the world. We are likely to see provisions for income tax and corporation tax further down the line.”

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource