Poor broadband is preventing many businesses and landlords from using digital tax platforms, new research has found.
According to a study by Ipsos MORI for HM Revenue and Customs, one in five firms and landlords are worried that inadequate broadband will prevent them complying with Making Tax Digital (MTD) obligations.
This backs up the findings of recent research by Cambridge Broadband Networks, which revealed that almost half of the UK's business broadband customers are not getting the speeds their provider had promised.
The HMRC study also found that one in five businesses and landlords are avoiding digital tax platforms because they do not have confidence in their digital skills.
Furthermore, seven in ten respondents admitted they are unaware of the MTD rollout, while one in three said making quarterly digital tax returns will be difficult.
The Federation of Small Businesses (FSB) responded by saying that plenty of work is needed to ensure the small business community can "reap the benefits of digital tax reporting".
Mike Cherry, National Chairman of the FSB, commented: "We know that a lack of digital skills within small firms is proving a barrier to growth across the UK - it could also threaten the successful take-up of MTD."
Mr Cherry warned that the lack of awareness of MTD is also a "real concern", which means there needs to be "a big push to get the message out there".
However, he acknowledged that the Treasury has listened to some of the small business community's concerns regarding MTD, as digital tax reporting has been made "optional for the smallest firms for the foreseeable future".