A majority of SMEs in the UK are unprepared for the switch to Making Tax Digital, a study from the ACCA and the Corporate Finance Network (CFN) suggests.
The figures show 14% of the 8,900 accountants asked said their SME clients were unprepared and will not be ready for the switch, and another 40% said clients were partially prepared for Making Tax Digital for Income Tax (MTD for ITSA).
Only 22% of accountants said their clients are fully prepared and have the right MTD-compatible software. In Scotland, 50% of accountants believe their clients are partially ready and a further 16% say they are completely ready for the switch.
Half of advisors in London say SMEs will be ready to comply with MTD for ITSA come 2024, compared to just 17% outside of London.
Accountants also report that when SMEs ask them for advice, they're more focused on tax compliance and access to finance than preparing for MTD.
Kirsty McGregor, founder of CFN, said:
"It's concerning that government interventions to aid efficiencies or growth are not landing as they should with SMEs, especially outside of London.
"While accountants, professional bodies and networks are offering advice, what's also needed is a co-ordinated and targeted government communications programme for SMEs to keep them appraised on what's available and the reasons they should be accessing these schemes."
Talk to us about Making Tax Digital.