Making Tax Digital is the latest move by the Government to make it easier for individuals and business to get their tax right and stay of top of their affairs. But there’s one small problem with this plan … according to our research, it seems that businesses in Cornwall just aren’t ready for it at the moment.
With the 1 April 2019 deadline looming for VAT registered businesses to become compliant, our survey shows that preparations will need to be stepped up given that:
• Only 22% of respondents said that they were fully aware of HMRC’s ‘Making Tax Digital’ move and the subsequent implications that the move would have on them.
• 70% of businesses that we surveyed in Cornwall didn’t fully understand when Making Tax Digital kicks in for their business.
• Just 18% said they were fully ready for the change on 1 April.
It is perhaps a sign of the times that businesses are sceptical about any changes being implemented by the government given that nearly 75% of respondents expected the implementation to be delayed.
Despite the lack of awareness and confusion, there is actually support for the benefits of Making Tax Digital from local companies. Our survey found that:
• 82% of companies felt that the implementation of MTD would make their organisation ‘more efficient’ or have ‘greater understanding of financial performance’.
• Only 11% felt that MTD isn’t necessary right now
This compares with a recent national survey by KPMG which shows that 64% of UK companies feel that MTD is a good idea but ‘wanted more support’. However 19% felt there are no advantages to changing the current VAT reporting system.
Laura Whyte, Managing Director at Whyfield, commented: “The findings make interesting reading: on the one hand there is business lethargy towards MTD but on the other hand most organisations think it is a good idea.”
She continued: “Whilst I understand why some organisations think there will be delays – especially with so much uncertainty at the moment – my advice is to take advantage of the opportunity. All of our clients are either ready or very nearly there and they will tell you that MTD cloud accounting systems such as Xero and QuickBooks are enabling them to make better business decisions.”
Laura concluded: “The switch needn’t be daunting. We offer free demos to enable businesses to choose the right system for them, the costs are less than a pound a day and there is time to make the switch if companies act now.”
For more information please visit https://www.whyfield.co.uk/making-tax-digital/ where you can view videos explaining the changes in more detail and have an opportunity to get 50% off a subscription with Xero or QuickBooks.