Business

Almost two thirds of businesses in the north not prepared for new digital tax system

Mal and Conaill McGrady, directors at M. B. McGrady & Co Chartered Accountants with qualified accounts tchnician, Ann McGurnaghan
Mal and Conaill McGrady, directors at M. B. McGrady & Co Chartered Accountants with qualified accounts tchnician, Ann McGurnaghan Mal and Conaill McGrady, directors at M. B. McGrady & Co Chartered Accountants with qualified accounts tchnician, Ann McGurnaghan

ALMOST two thirds of businesses in the north are not prepared for a new digital tax system, which came into effect today, a survey shows.

The new Making Tax Digital legislation requires VAT registered businesses above the threshold of £85,000 to keep digital records and submit returns using compatible accounting software.

However, despite this being one of the biggest changes to accountancy in a generation, many businesses are not prepared according to a new survey carried out by Belfast-based M. B. McGrady & Co Chartered Accountants.

The survey of over 70 local business has revealed that 60 per cent are not fully aware of the implications of Making Tax Digital, while just 13 per cent said they were 'completely ready' for the changes

Almost half (44 per cent) of respondents said they were ‘not at all’ ready for Making Tax Digital.

The survey further shows that around two thirds (63 per cent) of business owners are aware of when their business needs to start submitting its records electronically, but when asked about their current accounting systems, only 41 per cent of respondents said they are currently using cloud software, while 14 per cent of businesses are still using paper-only for their records.

Conaill McGrady, director at M. B. McGrady & Co Chartered Accountants said:

“Making Tax Digital is compulsory and may be a huge challenge for some clients’ businesses. We intend to focus on the benefits the change may bring, including real-time accounting, automation, reporting, cost savings and improved compliance. Switching over to a cloud-based accounts platform shouldn’t be seen as a burden, it’s an opportunity to get better control of your business."

Making Tax Digital is designed to make the UK tax system run more effectively for tax payers.

Future implementation of Making Tax Digital, including for those who pay income and corporation tax, has been placed on hold until April 2020.