21 Aug Are you ready for Making Tax Digital?
Are you ready for Making Tax Digital?
A survey conducted by Ipsos Mori for the government looked at the willingness and capability of small businesses to engage with and be ready for Making Tax Digital. In late 2017 2,900 small businesses and landlords were interviewed to gather data for the survey.
Surprisingly only 26% of the landlords and small businesses interviewed were using software for their tax obligations – however 74% were using an external paid accountant or tax agent.
The report sets out 5 market segments – defined by their perception or preparation for MTD. These are:
- Embracing – those open to change
- Receptive – not set up but can see the advantages
- Tentative – concerned about meeting obligations but positive
- Reluctant – have the skills to engage with Making Tax Digital but do not see the benefit
- Resistant – those who lack skills and infrastructure to implement
The research showed that tentative and resistant customers are more likely to be smaller businesses and landlords who are currently using paper for their tax and business transactions. Are you still using spreadsheets?
So all these facts and figures – what do they mean for you?
The survey shows that 40% of business are either reluctant or resistant to MTD with another 21% who are concerned but positive. 20% are receptive – with only 19% being embracing.
So that means that over 80% of the businesses and landlords surveyed are not ready for Making Tax Digital.
It also means that if you need to be filing VAT Returns digitally without manual intervention in April 2019 you are not alone, which is great.
But, come February and March 2019 there are going to be a lot of businesses requiring digital software to avoid filing penalties. Accountants and bookkeepers will be inundated with requests for help and the price of getting set up and the cost of assistance and help with training will no doubt increase.
Our Advice – Get set up now
Be prepared for Making Tax Digital – setting up is easy. And believe it or not – this new scheme will, in the long run, be of great benefit to you and your business. While it may seem like yet more red tape it will give you easy access to your business transactions and allow you to do so much more than you can if you are using spreadsheets.
Tasks such as Bank reconciliation , Raising invoices on the move, automated chasing of outstanding invoices and taking card payments will all be of great benefit to you once you are up and running.
To find out the benefits of cloud accounting visit the EA Assist website here. If you want to beat the rush and get set up then give us call. We offer a range of outsourced solutions to suit both you and your business needs.
Contact us now on 01379 646943 to organise your free fact finding meeting.
If you would like to download the full report please visit the HMRC website here.