New research by Accordance VAT reveals that some 78% of European businesses are unaware of the upcoming EU Four VAT ‘Quick Fixes’ legislation, and less than half (48%) are ready to manage the changes they will bring. Similarly, despite 58% of financial decision makers believing their companies will be affected by Real Time Reporting (RTR) in the next two to three years, almost two in five (38%) state that their businesses are not prepared for the adoption of RTR in the EU.
Digitisation is a major EU objective and is already underway as national initiatives in several member states. Although there is widespread recognition of the impact of RTR, only one in 10 (10%) businesses is currently ready to manage the changes RTR will entail. Despite this, on the whole businesses were positive about digitisation, with three in five (61%) considering data transparency a bonus, and 57% asserting that RTR could generate overall better compliance. However, two in five (41%) of businesses are concerned about the risks involved in submitting inaccurate data and having less time to correct mistakes, and a majority (63%) believe that the complexity of systems poses a serious challenge.
In fact, Accordance found that a majority of businesses are already acquainted with digital procedures, with 56% filing tax declarations through a RTR system in Europe, and 46% reporting use of an e-voicing solution.
Interesting comparisons can be drawn between UK and EU based businesses in terms of awareness and preparation for legislative changes; the vast majority (86%) of UK businesses were not aware of the scheduled Four VAT ‘Quick Fixes’, compared to just over half (57%) of EU businesses. Preparedness for the Four ‘Quick Fixes’ reveals and inversion of figures between the UK and the mainland; 71% of EU businesses feel prepared, compared to 71% of UK businesses who report that they are unprepared.
Accordance VAT Chairman Nick Hallam said “Our research shows that on the whole, businesses need to act to ready themselves for the future of VAT and the departure it signals from current practices. Far too many businesses are unprepared in the face of the changes to come – risking both their ability to comply and their bottom lines. Digitisation and EU-wide harmonisation of procedures offer internal benefits like improved productivity, accuracy and the reduction of risk. Crucially, improved compliance goes hand in hand with being a good tax citizen, and is fundamental to the future of the European social project and the services we have come to rely upon.”