94% not ready for April MTD changes, finds Azets’ online poll

An online poll of businesses carried out by accountancy and business advisory firm, Azets, has found that 94% are not prepared for Making Tax Digital (MTD) which is being introduced for sole traders from 6 April.

Landlords, sole traders and the self-employed with gross income above £50,000 per year will have to comply with a new Making Tax Digital (MTD) regime from next month.

Fraser Campbell (pictured), UK Head of Accounts and Business Advisory Services (ABAS) at Azets, said:

“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.

“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.”

The tax system is being brought closer to real-time with next month’s changes affecting 864,000 individuals and landlords nationwide – with numbers predicted to rise to 2.9m within three years as income thresholds are lowered.

Another poll question which asked what where the biggest concerns surrounding MTD for income tax saw more than 37% of respondents citing understanding what needed to be reported, 25% specifying knowing what was needed to comply and more than 21% pointing to choosing the right software.

Fraser Campbell added:

“While MTD will mean changes in processes and software that is compliant with MTD, the switch will also bring advantages for individuals with access to near real-time information and insight about their businesses, cashflow, income and taxes for the first time.

“Getting the right advice from the right people will help those who are in scope of it be ready and confident for its introduction – whether they’re affected by the changes this April, or in the years that follow.”

Azets is an international advisory, outsourcing and compliance Group, employing 8,200 people and supporting 100,000-plus clients through its network of 189 offices across Europe, including branches across the North West – in Manchester, Stockport, Bolton, Burnley, Lancaster, Preston and Shrewsbury.