Almost two thirds of businesses are in favour of the government’s Making Tax Digital scheme, but feel more help is still needed.
Making Tax Digital will form a major part of government plans to help businesses get their tax right and keep on top of their affairs, ensuring the HMRC becomes one of the world’s most digitally advanced tax administrations in the process.
The fundamental changes for business tax administration will make it more effective, efficient and ultimately easier for taxpayers to get their tax right.
Under Making Tax Digital, the majority of VAT-registered businesses above the threshold of £85,000 will be required to keep digital records, as well as submitting VAT returns by using compatible software.
This will be necessary from 1 April, but there will be a soft landing period of one year; further requirement for digital links throughout the VAT return process, or a digital audit trail, will be required until the 31 March 2020 deadline.
Research from KPMG reveals that 64% of businesses see Making Tax Digital as a good idea.
However, it comes with the caveat that those businesses feel more support is needed with plans, ahead of the 1 April 2019 deadline for VAT.
This is highlighted by the fact only 12% of businesses canvassed were both supportive and ready for the deadline to comply with new VAT legislation.
Almost one fifth (19%) said their businesses will not benefit from the changes, while 5% believe it will be damaging for them.
Chris Downing, Tax Partner at KPMG, described the fact that almost two thirds need more support as “worrying”.
He said: “With just over a month to go until the deadline, it’s worrying to see that almost two thirds of businesses say that they need more support and are still in the process of working out what they need to do.
“This could potentially be both costly and time consuming, depending on the changes that need to be made.”