• Register
Return to: Home > News > ICAEW: More awareness needed for Making Tax Digital

ICAEW: More awareness needed for Making Tax Digital

Over 40% of UK businesses that will be affected by Making Tax Digital (MTD) for VAT are unaware of the initiative, according to research by ICAEW.  

A quarter of all UK businesses are still using a paper based accounting system and this will not be permissible for MTD for VAT.

From the beginning of April 2019, MTD for VAT will become compulsory for VAT registered businesses making annual tax supplies of over £85,000.

Currently many UK businesses enter figures for their quarterly VAT return on the government’s GOV.UK website. This will change in the future as VAT registered UK businesses within the scope of MTD will have to use accounting software to complete their VAT returns.

ICAEW’s technical tax manager Anita Monteith said: “We continue to fully support HMRC’s ambition to increase the use of digital technology, but we are concerned that based on these results many businesses are not going to be ready for implementation in April 2019.

“The lack of awareness among businesses about MTD is of concern and needs to be addressed: the communications on MTD do not appear to be getting through to VAT registered businesses. We would like to explore with HMRC what more we as business advisers we can do to help. It is also clear that even among businesses that are aware of MTD for VAT, many of them have not started to prepare to implement it.”

Despite the lack of awareness, there has been a significant increase of businesses moving away from paper based systems since 2016. Overall, 38% of UK businesses use accounting software for keeping their accounting records.

Montieth concluded: “We would like to explore with HMRC what more we as business advisers we can do to help. It is also clear that even among businesses that are aware of MTD for VAT, many of them have not started to prepare to implement it. Given the need to review existing systems and potentially evaluate, purchase and test new software, this is a worry.

“We want to help make MTD a success and also ensure that businesses get this right, but time is running out. MTD for VAT is a major change in tax administration and it is important for the UK tax system that it is a success: this is too important to be rushed.”

 

By Mishelle Thurai

Top Content

    Addressing tax challenges and the digitisation of the economy

    As the economy becomes even more globalised through digital sources, the tax systems currently in place need to be scrutinised to examine whether they are still fit for current and emerging business models. Joe Pickard reports on the OECD’s approach to this issue.

    read more

    Primary financial statements: a game changer in reporting?

    International Accounting Standards Board chair Hans Hoogervorst delivered a speech at the Seminario International sobre NIIF y NIF, organised by the Consejo Mexicano de Normas de Información Financiera in Mexico. The Accountant presents the highlights.

    read more

    FASB readies standards for the netflix generation

    The US Financial Accounting Standards Board (FASB) has updated its accounting standard for entertainment, with a specific eye on keeping up to date with how episodic content, such as television programmes, is consumed in the modern world. Jonathan Minter reports.

    read more

    Brexit: why it takes two to tango

    Former TA editor Vincent Huck, now editor of Insurance Asset Risk, looks at why Brexit might unleash geopolitical intrigue in Europe’s accounting standard-setting scene – and why IFRS 17 will be an incredible source of opportunity for firms in the coming years.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.