More than half (51%) of finance workers within UK businesses have said their firm has rushed to implement new financial software in the last 12 months to meet new reporting demands and challenges like Making Tax Digital (MTD), according to research by spend management software provider Compleat Software.
However, three in 10 said their company has only upgraded their accounting software in the last six months as part of a ‘hurried attempt’ to make sure they can comply with the new rules.
MTD caused concern for many businesses due to delays in its implementation and it left many companies and accounting firms unsure of what new requirements would mean.
In April 2019, the UK government introduced MTD for VAT, requiring businesses with a turnover above the VAT registration threshold – £85,000 ($110,980.50) currently – to keep digital records and VAT purposes and submit VAT returns using MTD compatible software.
Compleat Software executive chairman Neil Robertson noted that the recent swathe of reporting changes being introduced in the UK had pushed firms to introduce more automation into their financial reporting but warned MTD was just the first step towards automated financial reporting.
Robertson said: “Just look at countries like Brazil, Argentina or around the EU and you can see a clear picture of what is coming in the future for UK firms. Governments in these countries are moving towards having all sales registered digitally with them so if a company bills a customer the government knows your revenue, so you pay all the tax you owe.
“MTD is just a small step down that road here in the UK so we’re going to see more pressure on companies and accounting firms to increase their level of automation systematically to be able to deal with a transaction-based tax system in the next few years.”