Significant number of UK firms 'unaware of Making Tax Digital for VAT'
Research carried out by the Institute of Chartered Accountants in England and Wales (ICAEW) has suggested that over 40% of UK businesses are 'not yet aware' of Making Tax Digital for VAT (MTD for VAT).
MTD for VAT is set to come into effect from 1 April 2019 for businesses with a taxable turnover above the VAT registration threshold (currently £85,000). As part of the initiative, firms will be required to file their VAT returns using MTD-compatible software.
The ICAEW found that just 54% of VAT-registered firms are currently utilising accounting software.
An additional 34% of firms surveyed stated that they will be relying on their accountant to assist them with MTD for VAT, whilst a further 20% revealed that they intend to purchase suitable software in the near future.
'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,' said Anita Monteith, Technical Tax Manager at the ICAEW.
'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.'