More than half of small and medium-sized companies believe there is enough information available about the self-assessment tax returns and just under a half of SMEs have lost money because of submission errors.
Can HMRC successfully Make Tax Digital while still struggling to push out the self assessment protocol? A survey of 1000 UK SMEs, commissioned by cloud accountancy software Pandle, has uncovered that despite feeling well informed on the recent changes to the system, almost half (49.23 per cent) of all SMEs have lost money in the submission process.
In light of HMRC moving forward with its plan to Make Tax Digital, two thirds (62.64 per cent) of people felt prepared for the change. While nearly 20% of people were unaware of the change to Making Tax Digital, 48.3 per cent were concerned over the process becoming more cumbersome and 13% worried about not being “tech savvy” enough to navigate the system.
To mitigate concern and allow SMEs gradual transition, the Spring Budget 2017 announced that it would allow over 3.1 million SMEs until 2019 to begin keeping digital records and send HMRC regular quarterly updates of any and all tax data. This will allow companies to continue getting to grips with the self-assessment process, as well as what will be expected of them digitally in the future.
The Making Tax Digital Plan is currently in it’s testing stage for online billing and reporting, and will move forward incrementally through 2020.
“It’s great that HMRC is allowing SMEs extra time to adjust to the system,” said Lee Murphy, owner of Pandle. “While there’s a lot of information available on the current system, these things are never as easy in practice as in theory. It will be increasingly important for companies to understand the self-assessment by 2019 when quarterly reporting is required. We conducted this survey for insight on how we could best contribute to SMEs who are struggling with the current tax system.”