Small firms Unaware Of Impending Tax Changes

18th December 2017.

A recent report commissioned by HMRC has revealed widespread ignorance among small businesses about the government’s upcoming tax modernization reforms.

The Government’s upcoming “making tax digital” (MTD) proposals which will encourage digital record-keeping, are largely unknown to a number of small businesses.

According to a report by the HM Revenue and Customs, seven in ten small businesses and landlords are not aware of the impending shake-up. The new reforms will oblige them to digitise their tax records and update HMRC four times a year. The proposals affect an estimated 1.6 million companies, 2.4 million self-employed people and 900,000 residential landlords, and the Association of Taxation Technicians (ATT) has described this apparent lack of awareness as a “serious problem”.

Another survey by market research organisation, Ipsos Mori, found 2,900 businesses and landlords were unwilling to comply with the requirements. One in four firms said they would only comply under the threat of fines, and a third said they expect complying to be difficult.

The Making Tax Digital initiative has been delayed to 2020 at the earliest for taxes other than VAT.

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