80% of impacted businesses unaware of MTD changes
With just one month to go until the rollout of the Making Tax Digital (MTD) for VAT extension, 82% of eligible businesses that are yet to comply are still unaware of the impending deadline
Despite an overall increase in awareness of the MTD deadline since November (from 13% to 18%), the latest survey by QuickBooks has found that less than a third (29%) of UK businesses know what they need to do to become MTD compliant and are confident of meeting the deadline. This has fallen from 38% since November, as the reality of getting up to speed approaches.
When is the deadline for VAT register business to sign up for MTD?
VAT-registered businesses with an annual turnover below £85,000 will need to have implemented MTD from 1 April 2022. Worryingly, the proportion of businesses that have ‘no idea’ what to do and are putting off becoming compliant has doubled from 8% in November to 16%.
Data from the study also reveals some of the key reasons why businesses are putting off being compliant, including:
- feeling like they don’t have time (32%)
- being uncomfortable with the technology involved (30%)
- not knowing what MTD is (29%)
- needing to talk to an expert first (28%)
- being scared to make errors (26%)
On average, respondents spend 4.5 hours a month worrying about their VAT returns, so gaining a better understanding of the technologies on offer to help could greatly reduce this.
Pauline Green, head of product compliance & programs at QuickBooks, said: ‘With just one month to go for the commencement of the MTD requirement, raising awareness of the deadline is even more important, to ensure as many businesses as possible are confident and ready ahead of 1 April.
‘For UK SMEs, failure to comply with MTD will lead to penalties on a first completed VAT return, on or after the deadline. Going digital may seem like a daunting prospect, but it doesn’t need to be – and there is plenty of help and support available for those who are yet to embark on the process, even as deadline day approaches.’
SME owners felt equally strongly about their need for more expert tech support throughout the process (39%) such as from a professional accountant, gaining greater awareness of when the deadline is (38%), and being clearer on what they needed to do (37%).
Independent research was conducted by Censuswide on behalf of Intuit QuickBooks with a representative sample of 1000 small business owners that are VAT- registered, with an annual turnover of less than £85,000.
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