Despite the looming 1 April 2019 deadline, the study by Thomson Reuters revealed that 56% of tax professionals “have yet to fully implement” plans for MTD.
While two-thirds will be ready in the next six months, 36% say they’ll take between six months and a year to have the right systems in place.
HMRC expects that from 1 April, MTD will impact reporting by VAT registered businesses and organisations with turnover above VAT threshold.
There is a deferred start date of 1 October for more complex businesses.
Kim Hau, a senior proposition manager for Thomson Reuters’ digital tax software, ONESOURCE Indirect Tax, pointed out some of the issues that taxpayers still have with HMRC’s new proposals.
“What is clear, and worrying, is how unprepared taxpayers are to meet the deadlines,” Hau said. “Although HMRC have tried to make the selection [of software provider] easier with a redesign of their website, taxpayers still do not understand what would work well for their business given the fast approaching deadline.
“The advice I would give is if your business is still not ready today for 1 April, a bridging solution may work best, with a view to moving to a more complete solution by October 2020 where possible,” she added.
Caroline Miskin, tax manager at ICAEW, agreed that there is undeniably still work to be done to prepare for MTD for VAT.
“Businesses will need to weigh up the costs of the various options and evaluate them against the current and future needs of the business.
“So, for those with limited numbers of transactions and those that maintain records in legacy software that will not be upgraded for MTD, the most straightforward solution could be simple software bridging products. For those more complicated businesses looking to the future and improving their existing systems, API enabled software might be the logical step.”
This is an opportunity for businesses, according to Hau. “In light of the pace in which tax is being digitalised across the globe, organisations need to start taking a much more proactive approach to their tax compliance,” she said.
“MTD is just one example of a way in which our government is making steps towards digitalisation, however if HMRC is striving to be the most advanced tax administration in the world, we can expect a lot more changes to come over the next three to five years.”
There is advice available for tax professionals on icaew.com/mtd.
HMRC has been contacted for comment.