More than 10% of UK businesses not aware of new tax requirement, survey claims

Adrian Hearn

Tens of thousands of British businesses are at risk of failing to follow new rules on keeping digital tax records, a survey claims.

More than one million firms with an annual taxable income of in excess of £85,000 are now legally required to submit VAT returns online.

But a survey of 500 senior decision makers at small and medium-sized (SME) businesses revealed 11 per cent of those polled are not aware of the new requirement.

Comissioned by accounting software developer Intuit QuickBooks, the survey also found there is confusion among businesses about whether they are complying with the scheme.

Of the business leaders polled, almost half (46 per cent) who thought they were compliant were found not to be, while a quarter of compliant companies did not think they were set up correctly for the changes.

While HMRC has said it will take a “light touch” approach to penalties in the first year of implementation, this is only where businesses are doing their best to comply.

Chris Evans, VP and country manager at Intuit QuickBooks UK, said: “Our findings show that there are still quite a large number of businesses which could be caught out by the changes.

''So we'd advise them to read up on Making Tax Digital or try our free MTD Checker tool, because there is nothing to be worried about.

“MTD is a huge opportunity to navigate digital adoption, to streamline operations, motor efficiencies and simplify tax.

“By backing small business owners through the transition of MTD we can help accelerate cash flow management and allow them to get paid faster and run their companies more effectively.”

The rules came into place for businesses on 1 April and, from October, various other groups including trusts, local authorities, not-for-profit organisations and public corporations will also be required to submit their tax figures digitally.

Businesses need to keep records digitally from the start of their accounting period using MTD-compatible software.

The study found moving to being MTD compliant is quicker (42 per cent) or as time consuming (44 per cent) as anticipated. Just 13 per cent said it took longer than they expected to prepare for the move.

To highlight how straightforward the process is, QuickBooks has produced a video of a stunt driver driving a black cab around an abandoned industrial estate with a businesswoman filling her tax returns in the back.

SWNS