Tax & admin Fred Heritage · 23 August 2016
Micro firms require greater clarity on tax digitisation
Owners of micro businesses remain in the dark about the government’s plans to overhaul the tax system, according to a recent study. A new poll by freelancer accounting service FreeAgent has found that some 43 per cent of Britain’s micro business owners and freelancers have no clue what the government’s new Making Tax Digital initiative is. Of the business owners that have heard of the proposals, as many as 86 per cent said they had not yet received enough information about it and are unaware of any changes likely to take place. The news follows the recent launch of six government consultation documents about tax digitisation, containing the first details of how the Making Tax Digital plan may impact micro business owners. Digital record keeping, alongside more regular updates to HMRC, are expected to be the main ways in which smaller businesses are likely to be effected after the new system launches in 2018. Commenting on the polling, FreeAgent CEO Ed Molyneux said: it’s clear that many micro businesses still require more information about what tax digitisation actually is and how it will potentially impact them. Despite being under-informed, the survey found that smaller business owners remain upbeat about a move to a digital tax system. Only one in five micro company owners believed that the initiative would make it harder to do business, while just eight per cent said they felt negatively about digital tax. Molyneux went on to say: Making Tax Digital will be one of the biggest changes made to the UK tax system for generations, and when micro businesses are well-informed about the changes, they are quite positive about them. this new consultation is a step in the right direction towards helping micro businesses understand more about tax digitization, but I hope we see even greater clarity over the plans in the future. In January this year, Business Advice spoke to Gary Turner cloud-based accounting platform Xero’s UK managing director about the move to a digital tax system.
ABOUT THE EXPERTFred Heritage
Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.