ONE quarter of companies in Scotland believe a UK Government digital tax scheme will not be beneficial to their business, according to research by KPMG.
Two-thirds of Scottish firms approve of the Making Tax Digital (MTD) initiative, which is designed to make the process of managing taxes easier and more efficient, but said they require more support ahead of an April 1 VAT deadline.
From that date, most VAT-registered businesses above the threshold of £85,000 will have to keep digital records and submit VAT returns using compatible software. Other firms with more complex needs are deferred to October 1.
After a soft-landing period of a year, further requirements for digital links throughout the VAT return process, or a digital audit trail, will be required until the deadline of March 31, 2020.
The KPMG survey asked 1000 businesses, including 100 in Scotland, about their attitude to MTD and the VAT deadline.
In Scotland, 63% said it is a good idea but that they need more support and 24% said that it offers their business no benefit.
Only 11% were supportive and ready for the deadline, with 2% reporting that it would be damaging to their company.
Alan Turner, head of tax for KPMG in Scotland, said: “With just over a month to go until the deadline, it is worrying to see almost two-thirds of businesses believe they need more support and are still in the process of working out what they need to do. This could potentially be costly and time-consuming, depending on the changes needed.
“Although 98% of VAT registered businesses already file VAT-returns electronically, MTD will involve significant changes to existing processes. For example, keeping digital records, maintaining a digital audit trail of all business transactions, and implementing new software to submit their VAT returns digitally.
“Once businesses have made those changes, then they also need to think about the flexibility of their systems and processes to meet potential future requirements under MTD. HMRC are seeking to become the most digitally advanced tax administration in the world. We are likely to see provisions for income tax and corporation tax further down the line.”
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here