Today, Intuit QuickBooks reveals the findings of its tracker research examining small business readiness for the government’s Making Tax Digital (MTD) legislation change. The deadline for businesses to implement this biggest tax legislation change in a generation is in just one week, on 1 April, but the results indicate that many small businesses are not ready and almost a fifth are unaware of the new legislation:
- Only 25% of small businesses have already taken all the necessary steps to become compliant with MTD
- Just 82% of small businesses have heard of MTD
- 24% of small businesses believe they are not yet compliant with MTD
- 15% of small businesses still claim to be keeping paper receipts
The ongoing research has been taking a regular pulse of MTD readiness for small businesses across the whole UK. The latest figures show a huge shift in attitude, with an increase of over 50% of businesses believing MTD will have a positive impact on their business.
Separate economic analysis commissioned by QuickBooks from specialist behavioural economists Volterra Partners predicted a Productivity Payout of £6.9bn for UK small businesses as a result of MTD. Volterra modelled a so-called ‘digital snowball’, leading to as much as £57bn gain for the country over the next five years as a result of MTD, open banking and legislation changes along with better training and support for small businesses.
For small businesses, there is still a way to go; over half of businesses expect to be compliant with MTD by the end of March. Thirty per cent anticipate they will become compliant in April, and 17% anticipate becoming compliant in May or later. Businesses must be compliant by the time of the submission of their first VAT return period starting after the 1 April implementation deadline by using HMRC recognised software such as QuickBooks.
Chris Evans, VP and UK country manager at Intuit QuickBooks said, “We understand that for some businesses, the transition to digital will not be without stumbling blocks. However, it presents a huge opportunity to streamline operations, drive efficiencies and simplify tax. It will enhance cashflow management and allow them to get paid faster and access capital to grow, powering prosperity across the UK.”