Most UK businesses are still not ready to go digital
Even though the UK’s Making Tax Digital (MTD) initiative has been mandatory for months now, many companies still haven’t taken the plunge and face hefty fines and penalties for non-compliance.
That’s according to a report by automated “Purchase to Pay” provider Yooz, who surveyed 200 UK financial executives and found that four out of five companies are just not prepared.
In most cases, finding compatible software seems to be the problem. While a handful (3%) have not even considered adapting to BAT requirements, 12% have thought about it, but have not yet started.
A fifth (21%) has started but is far from the finish line, while a third (34%) is almost ready.
“The easing period intended to give companies more time to adjust to MTD requirements ended on April 1, 2021, as companies need HMRC-approved software to stay in compliance,” said Magali Michel, director of Yooz.
“Companies that fail to comply with BAT rules could face heavy penalties at a time when many are just keeping their heads above water financially. Making Tax Digital is there to hold businesses accountable if and when something goes wrong, and the transition should be seen as an opportunity to embrace new technology and a better way to work.
Simplify the tax declaration
Making Tax Digital is the UK government’s attempt to simplify, digitize and modernize the tax filing process. Instead of being forced to file a large document every year, businesses will need to keep digital records of their accounts, using only HMRC-approved software, every quarter.
For individuals, they are required to send the information directly to HMRC via a personal account.
One of the biggest challenges for businesses is finding the right software, Yooz says. The government has promised to provide businesses with basic free software, in addition to several low-cost MTD-compatible options already on the market.
In addition, many programs that UK organizations are already using should be MTD compatible.