The government’s Making Tax Digital (MTD) plan is completely new information to one fifth of micro-businesses in the UK, research from FreeAgent indicates.
Surveying 580 UK micro-business owners – whose companies had fewer than 10 employees – about the government’s plans to modernise the tax system, 20 per cent responded that they did not know what MTD was about.
In addition to this, 84 per cent of respondents felt that the government had failed to provide sufficient information about MTD and how UK business owners would be affected.
Although a concerning amount of micro-business owners are unaware of the MTD plans, FreeAgent found that out of those micro-businesses which knew about the plans, 41 per cent felt positive about them. Only 11 per cent were negative about the plans, while 27 per cent responded saying they believe it will be easier to run their businesses as a result of the changes.
“Making Tax Digital will be one of the biggest changes made to the UK tax system for generations and will potentially start to impact businesses from as early as 2018,” said Ed Molyneux, CEO and co-founder of FreeAgent.
“But although many micro-business owners appear to be positive about the proposals, it’s clear from our research that many others still require more information about what tax digitisation actually is and how it will potentially impact them.”