It has been found that 43% of Small and Medium Sized Enterprises (SMEs) are unaware of the UKs Tax Digitisation plans.
Research conducted by Free Agent suggests that more information is needed on HMRC’s plans to transform the tax system through digital technology. For example, more research is required on freelancers who require to provide digital financial records and provide HMRC with quarterly tax updates.
FreeAgent also found that 86% of those who were aware of the Tax Digital Campaign have not been provided with information on how it will affect them.
However, considering the criticism of a lack of knowledge about the subject, only 8% of the contractors surveyed spoke negatively about the government’s plans for tax digitisation. This compared to 27% of people who feel positive about the plan.
45% of those surveyed think that digitalising tax will make life easier compared to only 20% who think it will make life more difficult.
HMRC are insisting that tax digitisation would be less of a burden, whilst announcing the six consultation documents.
However, 1.3 million small businesses with modest turnovers will be exempt from keeping digital financial record and will not have to provide HMRC with quarterly tax updates. As well as this, 1.6 million small businesses are already secluded from the tax digitisation plans.
Mike Cherry, the national chairman of the federation of Small Businesses, welcomed the announcement and insisted that the consultation documents also confirmed that those who cannot cross over to the digital side will not be forced to.
Edward Troup, executive chair of HMRC, stressed “Making Tax Digital represents very significant change. It will bring the tax system into the 21st century and help make HMRC one of the most digitally-advanced tax administrations in the world”.
