Making Tax Digital challenge for small businesses
Ahead of the requirement for all VAT-registered business to adhere to Making Tax Digital (MTD) for VAT, a provision which comes into force on 1 April 2022
Alison Horner, Partner at MHA, says this will be the really hard part of the MTD transition as very small businesses and sole traders will struggle with time-consuming software training larger companies could just about handle, but there are solutions:
“A large number of UK sole traders and micro businesses are now in the firing line as HMRC pushes ahead with the digitalisation of tax. From 1 April 2022 Making Tax Digital (MTD) for VAT will be extended to those VAT-registered businesses with a turnover below £85,000. These firms will be required to register for MTD and to maintain digital records. For many the switch to digital tax will represent a demanding and time-consuming transition. Around 52% of UK registered VAT businesses are set to be affected by this*.
“Larger companies got away comparatively lightly with switching to MTD for VAT which started in April 2019. They could afford to either hire the staff with the right computer skills or provide the training for existing employees to handle the systems needed for this digital transition. Very small businesses do not have this luxury.
To read the full article on our webiste, follow the link: https://mha-uk.co.uk/insight/company-update/making-tax-digital-challenge-for-small-businesses/