Fifth of Small Business Owners Still Use ‘Shoebox Method’ to Manage Accounts
A new report has revealed that 65% of UK small enterprises aren’t prepared for Making Tax Digital
16% of UK small businesses still use a ‘shoebox method’ to manage their accounts despite the fact all taxes will be managed online by 2020.
According to research by UK200Group, just 35% of smaller firms use online accounting software to manage their accounts while nearly a fifth make no effort whatsoever to record any information prior to submitting tax returns.
23% of those surveyed hold all relevant info in manually complied reports with 27% opting for spreadsheets on their computer.
Worryingly for businesses still opting for the pen and paper or nothing all, government initiative Making Tax Digital will see the tax system being full digitalised.
Richard McNeilly, chair of the UK200Group Digitalisation Taskforce and managing partner of Dains said:
“The ‘shoebox method’ users will have to learn how to keep records, invest in software and then spend time inputting the data they collect into the software.
“Making Tax Digital represents the single most significant change to the UK’s system of taxation in recent times, and many of our smaller business clients are simply not ready for it.
“The change to quarterly reporting will require all businesses to change their habits, but over half of the firms we surveyed are also going to have to change the systems they use to record data.
“If HMRC remains committed to having businesses report and pay their tax digitally by 2018, small businesses have only a short period of time to update their systems and many are still unaware that Making Tax Digital is underway.”