A survey for Association of Accounting Technicians (AAT) and the Association of Chartered Certified Accountants (ACCA) amongst MPs shows they are generally in favour of Making Tax Digital for small businesses. On 1 April 2019, three days after the UK is set to leave the EU, MTD for VAT will come into force for all those business with an annual taxable turnover above the VAT registration threshold.
There remains general concerns over the timeframe for the implementation of MTD-VAT. More than one in three (35%) MPs disagreed with the statement that VAT-registered businesses are adequately prepared to meet the compulsory requirements that their business will need to meet, when MTD-VAT comes into force.
However, MPs were generally more positive that the scheme would ultimately lead to beneficial outcomes for the nation’s small and medium-sized enterprises (SMEs). Nearly half (43%) of all MPs surveyed believe that MTD would have a positive effect on SMEs, with only 15% disagreeing with this statement.
A quarter (24%) of MPs remained neutral at this stage as to whether MTD would be positive for Britain’s small businesses, neither agreeing nor disagreeing with the statement, while 18% said they didn’t know.
Brian Palmer, tax policy expert, AAT said, “While there may be an immediate challenge for those businesses needing to file for VAT under MTD this year, the system is ultimately designed to make life far easier for taxpayers and businesses to regularly and automatically submit returns, rather than panicking to find paper receipts. In time, any pain associated with switching to a new way of reporting tax returns will become a distant memory.
“HMRC’s decision to initially introduce MTD for VAT reporting only, and even then only for businesses with VAT-able above the mandatory registration threshold of £85,000, means that many of the smallest firms remain exempt, for now, from digital reporting. For those that are required to report, we can only hope that the message about what needs to be done in preparation has got through.”
Jason Piper, manager, tax and business law at ACCA said, “As the minister for MTD, Mel Stride’s recent update to the House on its progress was interesting. The Minister rightly stated that MTD is an important modernisation of the tax system.
“Throughout this whole change process, it’s been increasingly important to bring the relevant business sectors with the government on this policy journey. Some have been left by the wayside, and so it is heartening to hear that HMRC will be expanding its communication activity so that awareness increases.”