Quarter of UK employers unaware of HMRC's Making Tax Digital scheme Quarter of UK employers unaware of HMRC's Making Tax Digital scheme

Quarter of UK employers unaware of HMRC's Making Tax Digital scheme
06 Jul 2018

Even though there is only 10 months to go, a quarter of UK businesses have little or no awareness of Her Majesty’s Revenue and Customs’ (HMRC) flagship Making Tax Digital (MTD) project.

According to research from the British Chambers of Commerce (BCC), some 25% of those questioned had never heard of MTD, and only one in 10 knew ‘a lot of details’ about the switch to the digitised tax system. All VAT-registered businesses will have to maintain digital VAT records and submit their returns online from April 2019 – just days after the UK leaves the EU. 

But even among those employers that are aware of the change, a quarter have made no preparations to deal with it – even though VAT-registered firms will be required to have MTD-compatible software in place to create VAT returns and connect to HMRC systems via an Application Programming Interface (API). 

The poll also found that businesses are experiencing low levels of satisfaction with the support provided to them by HMRC. Asked to rate the overall level of service, help and support received on a scale of one to five, 60% of firms gave the taxman a rating of three or less.

As a result, the BCC is calling for the introduction of Making Tax Digital to be delayed until the start of the 2020/21 financial year in order to give HMRC more time to engage effectively with employers, ensure the necessary software is in place and to raise awareness levels about the impending changes.

Mike Spicer, BCC’s director of economics and research, said: "We are concerned that far too many firms still aren’t clear on what Making Tax Digital is, or what it means for their operations. With just months to go before the deadline, these knowledge gaps could make the timeline for change unworkable for many firms."

But it was also important that ministers faced up to the reality of “the pressures facing HMRC” and that they delay the introduction of Making Tax Digital for all businesses over the next financial year. “This would allow the Revenue to focus its immediate attention on supporting businesses through the Brexit process, which must be a key priority," Spicer said. 

Dawn Register, tax dispute resolution partner at accountancy firm BDO, said MTD would affect a huge number of businesses and require significant investment in compliance terms.

"UK taxes are subject to extensive legislation, which makes distilling and understanding what is needed a highly complex task," she added.

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

Even though there is only 10 months to go, a quarter of UK businesses have little or no awareness of Her Majesty’s Revenue and Customs’ (HMRC) flagship Making Tax Digital (MTD) project.

According to research from the British Chambers of Commerce (BCC), some 25% of those questioned had never heard of MTD, and only one in 10 knew ‘a lot of details’ about the switch to the digitised tax system. All VAT-registered businesses will have to maintain digital VAT records and submit their returns online from April 2019 – just days after the UK leaves the EU. 

But even among those employers that are aware of the change, a quarter have made no preparations to deal with it – even though VAT-registered firms will be required to have MTD-compatible software in place to create VAT returns and connect to HMRC systems via an Application Programming Interface (API). 

The poll also found that businesses are experiencing low levels of satisfaction with the support provided to them by HMRC. Asked to rate the overall level of service, help and support received on a scale of one to five, 60% of firms gave the taxman a rating of three or less.

As a result, the BCC is calling for the introduction of Making Tax Digital to be delayed until the start of the 2020/21 financial year in order to give HMRC more time to engage effectively with employers, ensure the necessary software is in place and to raise awareness levels about the impending changes.

Mike Spicer, BCC’s director of economics and research, said: "We are concerned that far too many firms still aren’t clear on what Making Tax Digital is, or what it means for their operations. With just months to go before the deadline, these knowledge gaps could make the timeline for change unworkable for many firms."

But it was also important that ministers faced up to the reality of “the pressures facing HMRC” and that they delay the introduction of Making Tax Digital for all businesses over the next financial year. “This would allow the Revenue to focus its immediate attention on supporting businesses through the Brexit process, which must be a key priority," Spicer said. 

Dawn Register, tax dispute resolution partner at accountancy firm BDO, said MTD would affect a huge number of businesses and require significant investment in compliance terms.

"UK taxes are subject to extensive legislation, which makes distilling and understanding what is needed a highly complex task," she added.

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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