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Tax experts: Action needed to get businesses MTD ready

More needs to be done to help businesses prepare for the introduction of Making Tax Digital (MTD), according to the Association of Taxation Technicians (ATT).

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The call comes after a report which indicated that many small businesses and landlords remain unprepared for the start of MTD. The report was commissioned by HMRC from Ipsos MORI to help the tax authority understand the factors that influence the willingness of small businesses and landlords to transition into MTD.

 

From April 2019, businesses above the VAT threshold will be mandated to keep their records digitally and provide quarterly updates to HMRC for VAT purposes.

 

The findings of the report have led the ATT to recommend that HMRC step up their publicity efforts and produce clear, practical guidance to ensure that all relevant businesses are ready for this change. While MTD will not be compulsory for income tax until April 2020 at the earliest, the ATT also recommends that the turnover threshold for that tax be confirmed soon, to remove uncertainty and encourage affected businesses to start their preparations.

 

Yvette Nunn, co-chair of ATT’s technical steering group, said: “This report highlights that, although the MTD proposals have been around for some time, there remains a large amount of work to do to get small and medium sized businesses up to speed.

 

“Lack of awareness of the MTD requirements remains a serious problem. At the time of the survey 60 per cent had not heard about either the digital record keeping or quarterly reporting requirements of MTD.”

 

Nunn added: “It would be helpful for the turnover threshold for MTD for income tax to be confirmed as soon as possible. Removing that element of uncertainty could encourage those businesses which will have to comply with MTD requirements in future to start making preparations for their introduction. Without this, many small businesses and landlords will remain reluctant to commit time and resources to prepare for requirements which they believe may never apply to them.”

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