According to a new study, Making Tax Digital (MTD) is currently one of the biggest concerns for VAT-registered small business owners.
The research, prepared by Intuit QuickBooks, found that more than three-quarters of SME owners found the legislation challenging and difficult to understand.
It also reveals that 70 per cent were struggling to find the right new tools to help them comply, including 63 per cent of owners who weren’t sure which cloud-based software they would use.
Other concerns about MTD highlighted in the survey by SMEs include finding the additional time and managing the additional work.
This study shows that few SMEs are ready for the new MTD regime, which is due to come into effect in April 2019.
Under the current rules, VAT registered businesses with turnovers exceeding £85,000 will be required to maintain a digital record of their VAT transactions and submit their VAT returns using MTD-compliant software on a quarterly basis.
Worryingly nearly half (41 per cent) of small business owners are still unaware of MTD, with a further 22 per cent aware of what it is, but only planning to file taxes digitally if they are likely to incur financial penalties.
Accountants have also cited client education as their top concern in the lead up to MTD, with 29 per cent of those surveyed having concerns. This came just ahead of adapting their own practice to comply with MTD (27 per cent), and training clients on online software (27 per cent).
This research highlights the value of our recent talks and the ongoing advice that we are able to provide, so please get in contact with us if you have any queries regarding MTD.