Making Tax Digital (MTD) is the biggest concern for VAT-registered business owners as they transition to digital accounting.

Research released by one of our software partners, Intuit QuickBooks, has found that learning about Making Tax Digital (MTD) is the biggest concern for VAT-registered business owners as they transition to digital accounting.

As we’ve described previously, MTD is part of the Government’s plan to become one of the most digitally advanced tax administrations in the world.  The proposals aim to implement digital record keeping by introducing quarterly updating for all but the smallest businesses, starting with VAT-registered entities from April 2019.

Worryingly, QuickBooks’ survey has found nearly half of small business owners are still unaware of MTD, and 22% are aware of what it is but are only planning to file taxes digitally if they are to incur financial penalties.  As you might imagine, there will be a penalty regime for non-compliance with MTD, although we are assured by HM Revenue & Customs of a “soft landing” to the new regime, with penalties being deferred in the first 12 months except in cases of deliberate non-compliance.

We are currently working with our clients to ensure MTD-compliance and, more importantly, to ensure our clients are comfortable with and able to thrive in the world of digital accounting.  But it’s not all about MTD-compliance.  The transition to digital accounting should contribute to a more streamlined approach to business finance giving us the opportunity to invest more time together on a consultative approach, advising clients and their businesses rather than spending time on tax compliance.

We are confident our clients are well advised and will be well position for MTD, but more generally QuickBooks’ research shows a lack of awareness in the wider business community.  We are keen to help educate those businesses who will be affected come April 2019, so please do not hesitate to contact us if that includes you, and please feel free to pass our contact details on to friends, clients and contacts who may also need assistance.