HMRC commissioned research between September and December 2016 to explore the attitudes, behaviours and digital capability of small businesses and landlords in relation to making tax digital for business (MTD). This involved a survey of 2,900 businesses and landlords, and follow-up in-depth interviews with 30 customers identified in the survey as being in need of additional support. The aims of the research were to:
quantify the small business and landlord population in terms of their likely engagement with MTD; and
identify barriers and levers to engagement with MTD, and support and information requirements.
Key findings included:
74% of respondents used an external, paid accountant;
21% managed their tax affairs themselves;
87% found keeping records of income and expenditure, calculating payable tax, and completing and submitting returns ‘straightforward’;
80% or more were recording transactions, invoices and receipts in real time, or at least quarterly; and
19% did all their record keeping at the end of the tax year.
Use of spreadsheets or paper methods for record keeping was more widespread than software. The main reason for not using software was a perceived lack of need. One in five cited a lack of confidence with technology. Software use was highest among those liable for CT (52%) and lowest among landlords (13%).
At the time of the survey, 70% of respondents were unaware of the requirements to use software or to send quarterly updates to HMRC. Those using software had higher awareness of the forthcoming changes.
Nevertheless, 70% expressed willingness to comply with MTD, while 15% said they would choose not to submit quarterly reports if paying a fine was cheaper than complying.
Taxpayers were split on how easy or difficult it would be to comply with MTD requirements. Around 40% thought it would be easy, while a third believed it would be difficult.
Asked who they would turn to for advice about MTD, 72% would approach an accountant or tax agent, 20% would use the HMRC website, 13% the HMRC helpline, and 5% would ask family and friends.
The report, Making tax digital for business: Survey of small businesses and landlords, is available at http://bit.ly/2ykl3SV.
HMRC commissioned research between September and December 2016 to explore the attitudes, behaviours and digital capability of small businesses and landlords in relation to making tax digital for business (MTD). This involved a survey of 2,900 businesses and landlords, and follow-up in-depth interviews with 30 customers identified in the survey as being in need of additional support. The aims of the research were to:
quantify the small business and landlord population in terms of their likely engagement with MTD; and
identify barriers and levers to engagement with MTD, and support and information requirements.
Key findings included:
74% of respondents used an external, paid accountant;
21% managed their tax affairs themselves;
87% found keeping records of income and expenditure, calculating payable tax, and completing and submitting returns ‘straightforward’;
80% or more were recording transactions, invoices and receipts in real time, or at least quarterly; and
19% did all their record keeping at the end of the tax year.
Use of spreadsheets or paper methods for record keeping was more widespread than software. The main reason for not using software was a perceived lack of need. One in five cited a lack of confidence with technology. Software use was highest among those liable for CT (52%) and lowest among landlords (13%).
At the time of the survey, 70% of respondents were unaware of the requirements to use software or to send quarterly updates to HMRC. Those using software had higher awareness of the forthcoming changes.
Nevertheless, 70% expressed willingness to comply with MTD, while 15% said they would choose not to submit quarterly reports if paying a fine was cheaper than complying.
Taxpayers were split on how easy or difficult it would be to comply with MTD requirements. Around 40% thought it would be easy, while a third believed it would be difficult.
Asked who they would turn to for advice about MTD, 72% would approach an accountant or tax agent, 20% would use the HMRC website, 13% the HMRC helpline, and 5% would ask family and friends.
The report, Making tax digital for business: Survey of small businesses and landlords, is available at http://bit.ly/2ykl3SV.
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