One week to go—are you ready for MTD?

Content courtesy of Accountancy Age: 

A week today will mark the beginning of the biggest change in tax legislation in a generation—Making Tax Digital (MTD). This is set to change the way around 1.2 million businesses currently operate.

Even though HMRC and several software-approved companies have been asserting the importance of all qualifying businesses making sure they ready the change to the tax legislation, Intuit QuickBooks, through their tracker research, has revealed that many SMEs are still not prepared.

One-fifth of these businesses remain entirely unaware of the new legislation and how it will affect them.

Intuit QuickBooks research has been taking “a regular pulse of MTD readiness for small businesses across the whole UK.”

A summary of the results Intuit QuickBooks has gathered are as follows:

  • 25%: SMEs have taken all the necessary steps and are compliant with the new regulations.
  • 82%: SMEs have heard of MTD.
  • 24%: SMEs have admitted to not yet believing they are compliant.
  • 15%: SMEs are keeping paper receipts and have not yet moved online.

Latest figures gathered by Intuit QuickBooks have identified a huge shift in attitude towards MTD. For example, over 50% of businesses now believe that MTD will have a positive impact of their business.

Nonetheless, QuickBooks went on to warn that “[f]or small businesses, there is still a way to go; over half of businesses expect to be compliant with MTD by the end of March.”

Economic analysis commissioned by QuickBooks from the specialist behavioural economists, Volterra Partners, has predicted a Productivity Pay-out of £6.9bn for UK SMEs, because of MTD.

Volterra modelled a ‘digital snowball’; this could lead to as much as a £57bn gain for the UK over the next 5 years, because of the likes of legislation changes, better training, support for small businesses, opening banking, and Making Tax Digital.

QuickBooks stated: “Businesses must be compliant by the time of the submission of their VAT return period, starting after the Monday 1 April implementation, by using HMRC recognised software.”

30% of those businesses who took part in their research anticipated that they would be MTD compliant by the end of April, and 17% by May or later.

“We understand that, for some businesses, the transition to digital will not be without stumbling blocks,” said Chris Evans—VP and UK country manager at Intuit QuickBooks. “It presents a huge opportunity to streamline operations, drive efficiencies, and simplify tax. It will enhance cashflow management and allow them to get paid faster and access capital to grow, powering prosperity across the UK.”

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