Making tax digital chaos is unwanted distraction for SMEs
One of the country’s leading tax advisors says SME businesses should press ahead with digitalisation plans despite ‘chaos’ surrounding the Government’s Making Tax Digital (MTD) launch.
The advice comes as the government confirmed MTD will again be delayed until 2026, having originally been scheduled for 2023 and deferred to 2024, after days of speculation.
Praveen Gupta, partner & national head of tax at Azets, the UK Top 10 firm, believes digitalisation could fall down the list of priorities for stretched SME businesses but says early adoption of technology is beneficial.
He said: “Confirmation of the government’s decision to further delay the introduction of Making Tax Digital only adds to the unrelenting uncertainty faced by SME business owners and entrepreneurs over the two years, at a time when much needed stability has been promised.
“SME business owners can ill afford the hours and cost spent preparing for MTD compliance, only for the deadline to shift again. Many businesses are working tirelessly just to keep the lights on during the cost-of-living crisis, compounded by ongoing disruption to global supply chains and rising interest rates to control historic inflation. MTD is at risk of becoming an unwanted distraction.
“By delaying MTD until 2026, digitalisation could now simply fall down the priority list of busy business owners, many of whom are purely focused on fighting the next fire and do not have the resource to plan long-term.
“We wholeheartedly support the move to digital accounting. However, the launch of MTD has been chaotic from the start and there is little evidence to suggest this will improve over the next two years, during which time there will be a general election.
“Our advice to business owners is to continue with digitalisation plans, despite the potential for further delays. Adopting accounting technology has enormous benefits in that it provides critical real time information, and doing so well in advance of MTD coming into effect will help you smooth the process before it becomes mandatory.”
