With Making Tax Digital set to change the way companies prepare their books from 2019, it’s vitally important that business owners acquaint themselves with digital accounting sooner rather than later.
While around 60 per cent of business owners feel they are prepared for digital tax returns, perhaps because they already use cloud accounting software, four in 10 believe that they still need additional training and support.
Likewise, seven in 10 business owners do not know what is fully required from them once Making Tax Digital comes into full effect in April 2019.
From that date, businesses will be required to use online cloud accounting software to meet their VAT obligations. This applies to businesses which have a turnover above the VAT threshold (currently £85,000). Smaller businesses are not required to use the system, but can choose to do so voluntarily.
Landlords earning above the VAT threshold seem to be most at risk of non-compliance, as the survey found that just a quarter (26 per cent) used software for record keeping.
Mike Cherry, chairman of the Federation of Small Businesses, urged businesses to see Making Tax Digital as a priority.
“Clearly, there needs to be a big push to get the message out there” he said.
“Filing VAT returns online will present a significant challenge for many so it’s vital that support for these businesses is prioritised over the next eighteen months.”