What do small businesses really think of Making Tax Digital?

With HMRC’s plans for Making Tax Digital (MTD) still to be finalised, research conducted by award-winning cloud accounting provider, FreeAgent, indicates that there is increasing uncertainty among micro-business owners and freelancers about what the initiative means for them. Here are the results*:

84% think there's a lack of information
84% of the UK’s micro-businesses and freelancers feel the government has not provided enough information about its plans for MTD, while 20% say they haven’t even heard of Making Tax Digital yet. Despite the majority of the UK’s unincorporated businesses being required to use some form of digital tax reporting as early as next year, the survey highlights that many are still unclear about what will be required of them or the potential impact it could have on the way they manage their finances. Just 4% feel they have enough information about how MTD will impact them.

41% feel positive about Making Tax Digital
The survey also found that 41% of micro-business owners feel positive about MTD and 27% of respondents think the new digital tax legislation will make running their businesses easier. Only 14% feel that MTD will make their life harder.

Preparing for impact
Although a lot of the surveyed business owners feel that MTD will have a positive effect on their businesses, many still don’t know enough about digital tax or the impact it will have on their financial reporting. MTD will undoubtedly be a major shift in the way that all UK businesses manage their finances, and as the government provides more information it should become easier for the UK’s micro-businesses and freelancers - and their accountants -  to prepare.

Educate your clients on the impact of Making Tax Digital - get FreeAgent’s shareable guide, explaining what the initiative means, key dates, and how best to prepare.

*Total sample size was 701 owners of UK micro-businesses with fewer than 10 employees. The survey was carried out online between 15th December 2016 to 17th January 2017.