Making Tax Digital software to cost SMEs an average £564

(2 minutes to read)

Despite government claims that Making Tax Digital will make it easier to report, only one in ten SMEs think it will have a positive impact on their tax reporting and financial management processes.

With Making Tax Digital (MTD) set to launch on 1st April, findings have revealed that half of VAT registered smaller sized businesses do not currently have the right software in place.

The Federation of Small Businesses (FSB) found that more than a quarter (27%) of firms have not started preparing for MTD, and a further one in five (23%) have received quotes for software that will make them compliant, but are yet to purchase access to any. A small proportion (3%) say they have been part of the MTD pilot.

According to the research, small firms have said that putting MTD-compliant software in place this year will cost £564 on average.

And, the bigger the business, the higher the cost. For example, those with a turnover between £500,001 – £1 million are set to be landed with an £872 bill for MTD-compliant software on average. For firms with a turnover of more than £1 million, that figure rises to £1,019.

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FSB National Chairman Mike Cherry, commented, “We’re only three weeks away from the roll-out of MTD and small businesses are clearly not prepared for it. That being the case, the Chancellor must double down on his commitment to light-touch enforcement when he delivers the Spring Statement on Wednesday. Small business owners shouldn’t be punished for honest mistakes, made more likely by a rushed HMRC roll-out.

“Promises were made that MTD compliance would be affordable. Now many firms are finding themselves on the hook for hundreds of pounds for software. At a time when small business confidence is in the doldrums – and wages, auto-enrolment contributions and business rates are rising – more costs and admin burdens are the last thing they need. They also have the small matter of Brexit to think about.

“While we’ve worked hard to ensure our members are aware of MTD, firms are finding it far more difficult, time-consuming and expensive to become compliant than was predicted by HMRC – not least because of a cumbersome registration process.

“We now need to see a full review of the MTD rollout and a guarantee that it won’t be forced on those below the VAT threshold until at least the end of this Parliament, in 2022.”

To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.

Why Dolan Accountancy?

Dolan Accountancy was set up by Simon J Dolan, the man behind the well-known brand SJD Accountancy. With over 25 years experience in the contracting marketing, Dolan Accountancy has the heritage, reputation and credibility you can trust. Working closely with our sister company, ContractorUmbrella, it means we can offer one low cost, fixed fee package at £95 + VAT per month. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost. We don’t believe in tiered packages or hidden extra fees, instead we aim to give you everything you need, including:

  • Free Company Formation – This is where it all begins. Once you have decided on an available name, we will form your company free of charge (if using our accountancy services) and it will be ready for you to use in as little as three hours.
  • Free use of ContractorUmbrella – With changes in Public Sector IR35 Legislation we understand that sometimes you are required to contract via an umbrella company. We will keep your limited company ticking over, while you work margin free via our sister company, ContractorUmbrella.
  • A Dedicated Accountant – Your accountant will be there for any company or personal tax advice that you require. We will never outsource work, even to internal teams.
  • Free Access to FreeAgent – The founder behind the multi award winning FreeAgent platform was one of Simon’s first clients, therefore it only seems fitting that we offer all of our clients access to FreeAgent, free of charge.
  • Free Business Banking – We have decided to waive our commission so our clients can use Tide free of charge for the first year.
  • Unlimited IR35 Status Reviews – We will review all of your contracts for IR35 purposes and provide you with our professional opinion as to its status.
  • Free Registered and Director’s Service Office Address – Sometimes you just don’t want your home address on display at Companies House. When you sign up to our accountancy services, we will offer the use of our address as an alternative.
  • Your Business and Personal Taxation Needs – This includes Company Accounts, Director’s Personal Tax Return, VAT Returns, Payroll, Corporation Tax and Dividend advice, to name just a few.

If you’d like to find out more about how Dolan Accountancy can help you and your business, please give us a call on 01442 795100 or email sophie.lewis@dolanaccountancy.com or jaime.thorpe@dolanaccountancy.com.

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