A tiny traders’ group has called on the taxman to delay the introduction of digital accounts for small businesses and contractors.
The British Chamber of Commerce (BCC) said that the move makes sense because many small businesses are not ready to go digital, as the only thing that they know about the “Make Tax Digital” plan is the name.
According to the BCC, as many as 66% of small businesses only know the name or a few details of the scheme. This warning comes after the BBC released the results of a poll of over 1,000 small businesses.
However, the survey also showed that as many as 24% of small businesses are not even aware of the scheme. Even among those businesses that are aware of the incoming digital tax accounts, roughly 25% have made no preparations for the changes.
The BCC said: “This is a concern, as MTD will require VAT-registered firms to have MTD-compatible software in place that can create a VAT return and connect to HMRC systems via an API. This is a much more complex process for businesses than the current online process of manual completion of VAT returns.”
All VAT-registered businesses must be able to maintain digital records and submit their returns to HMRC digitally by April 2019.
The BCC sees this as problematic because this date is just a few days after the UK will exit the EU, leaving business owners with just ten months to get ready for what will be one of the biggest shakeups in accounting. Only 6% of companies that are aware of MTD have approached HMRC for advice, which means that many may find the timeline unworkable.