A new survey by Azets has found that 94 per cent of businesses are not fully prepared for the introduction of Making Tax Digital, with the new tax reporting requirements due to take effect from 06 April.
The poll, carried out by the accountancy and business advisory firm, found that more than 63 per cent of respondents had not prepared at all for the changes, while a further 31 per cent said they had only started getting ready. Fewer than 6 per cent reported being fully prepared.
Azets, which has offices in Witney and Bicester, said the findings highlight significant concern ahead of what it describes as the biggest tax administration reform since self-assessment was introduced nearly three decades ago.
Fraser Campbell said many businesses remain uncertain about what the new requirements involve.
“The online poll showed overwhelmingly that the majority of businesses are simply not ready for MTD.
“I was alarmed that more than 63% of respondents were not prepared at all while another 31% have simply ‘started preparing’.
“Less than 6% reported that they were ready for the introduction of MTD, which is worrying given that it is the most significant overhaul of the tax system since the introduction of self-assessment 29 years ago.”
From next month, landlords, sole traders and self-employed people with gross annual income above £50,000 will be required to comply with the new digital reporting regime.
The reforms will require affected taxpayers to keep digital records, use compatible software and submit quarterly updates, followed by a final declaration.
Campbell said one of the main concerns raised by respondents was understanding reporting obligations, with more than 37 per cent saying they were unsure what needed to be reported.
A further 25 per cent cited uncertainty around compliance requirements, while more than 21 per cent said choosing suitable software was their biggest concern.
“Time is of the essence. We urge all businesses affected to put plans in place to deal with this shift to ensure a smooth and compliant transition.
“Perhaps the biggest change is the need to keep digital records, use MTD-compatible software and submit updates every quarter, as well as a final declaration.”
Azets said it is supporting clients through technology, advice, workshops and specialist guidance delivered by more than 1,000 advisers nationwide.
