MAKING TAX DIGITAL – NEW GOVERNMENT PROPOSALS
The Giftware Association CEO Sarah Ward recently attended a recent Genesis Initiative meeting at Westminster, to discuss new proposals for making tax digital. The HMRC’s ‘Making Tax Digital’ programme will compel all but the smallest businesses to self-manage their tax affairs in a real time online environment. These plans will affect the everyday running of our members’ businesses but hopefully with advantages in terms of efficiency and reduced stress that will see an increase in productivity. Sarah Ward was in attendance representing the home and giftware industry.
Under the new initiative, from April 2019, businesses registered for VAT that have a turnover above the VAT registrations threshold of £85k will be required to keep digital tax records for VAT purposes and submit VAT tax returns through suitable software. The initiative has been delayed from July 2017 but will come into force next April in stages.
The Genesis Initiative has had concerns about the digital skills gap in SMEs, for the MTD programme to be successful there needs to be a considerable amount of upskilling on specific systems. The Genesis survey and focus group process suggest:
- That at least 40% of SMEs are not adequately aware of MTD and the advantages it offers
- Leaders respond, the digital tail tends not to. This means that the proportion of SMEs unaware of MTD could be higher than the stated 40%
- At least 25% of SMEs still use primarily manual systems, without the assistance of accounting software, particularly at the smaller and self-employed end of the business spectrum
- Less than 15% of those with awareness of MTD have become so via government sources. Trade bodies and online sources appear to have greater reach
- Over 90% of SMEs would point to advice from their accountant or a software provider as the best way to become more digitally resilient, but 7-% think HMRC should provide specific MTD training
- The potential advantages of MTD is as yet unclear among many small businesses, with equal proportions seeing negatives as those who see positives.
- Genesis focus groups suggest trade association members have real concerns about the potential complexity of complying with MTD even with compatible software, but in contrast the same groups pointed towards some positive individual experiences. This may reflect fear of change as a factor in the run-up to implementation.
Sarah Ward said “It’s amazing to be a part of these talks and these meetings as we really want to represent the industry that we serve and having stronger ties to government. We feel really privileged to be a part of this historic decision and how it will affect our industry and our members.”
Sarah will next be attending Westminster on Friday, again with the Genesis Initiative to discuss businesses access to finance. If you have any questions regarding our government trips or if you have anything that you would like to raise, then please get in touch with a member of the team.
To find out more about making tax digital, check out the official government site here – https://www.gov.uk/government/publications/making-tax-digital/overview-of-making-tax-digital