With under two weeks remaining until the first Making Tax Digital (MTD) for Income Tax submission deadline, new research1 from Lloyds suggests that more than half (54%) of small businesses in London still have work to do before they are ready to comply with the new rules, compared with 55% of small businesses UK-wide.
The findings come as sole traders and landlords move to HMRC’s MTD for Income Tax requirements, which asks eligible taxpayers to maintain digital records and submit quarterly updates using compatible software.
Kirsty Sadler, Regional Director for London at Lloyds, said: “Making Tax Digital represents one of the biggest administrative changes many sole traders will have experienced for years. Our research suggests that while businesses recognise the benefits of digital record keeping, many are still working through what they need to do before the first submission deadline.”
“With small business owners already balancing multiple demands on their time, simplicity matters. That’s why we’ve built HMRC-recognised Making Tax Digital for income tax functionality directly into eligible Lloyds Business Accounts at no extra cost, helping customers manage tax administration alongside their everyday banking.”
Among small businesses in London already preparing for the first submission on 7 August, 45% said the move to digital tax management had helped them become more organised, while 33% said it had reduced last-minute tax stress.
Nearly all respondents in London (95%) said it would be useful to manage tax records, deadlines and administration through their banking app or online banking, highlighting demand for simpler ways to comply with the new rules.
Lloyds recently integrated new Making Tax Digital software into its business account. The HMRC-recognised free tool helps sole traders keep digital records, categorise income and expenses, save receipts and prepare quarterly updates.3
The new rules apply to sole traders with annual revenue of £50,000 pa and above, reducing in the next two years to £30,000 and then £20,000.
