SMEs losing £25b a year due to tax admin

(2 minutes to read)

FSB: ‘Small businesses are fully behind the government’s vision for a high skill, high productivity, low tax economy. With costs soaring, and the Budget approaching, it’s now time to see the policies that will get us there’.

In a new report, it has been found that the government’s Making Tax Digital initiative has resulted in significantly increased costs and admin burdens for smaller sized businesses.

This is according to findings from the FSB’s (Federation of Small Businesses) recent publication ‘A Duty to Reform: Making tax work for small businesses in a digital world’, which revealed that for SMEs participating in the Making Tax Digital (MTD) programme the average cost of tax compliance is £4,562. For those yet to join, this figure is at just £2,960.

So far, seventy per cent of small businesses have made the MTD switch; among them, 71% say that the move has resulted in increased costs and time lost to learning new processes.

FSB National Chairman Mike Cherry, said, “Small businesses are fully behind the government’s vision for a high skill, high productivity, low tax economy. With costs soaring, and the Budget approaching, it’s now time to see the policies that will get us there.

Thinking of appointing Dolan Accountancy?

Give us a call on 01442 795 100 or email

Email Jaime

“Reducing the huge amount of time and money lost to tax bureaucracy would free up billions for investment, upskilling and digitalisation. We’ve always said that – rolled-out in the right way – MTD could mean productivity gains over the long-term.

“However, for many of those who’ve already taken the plunge, the programme has so far yielded higher costs and greater complexity.”

The report also found that the requirement to register for VAT once a firm has £85,000 of turnover serves as a barrier to growth for one in four (24%) firms.

Commenting on this, Cherry said, “As things stand, more than a million firms say they’ve stopped growing their turnover because of the VAT threshold. If we want the economy firing on all cylinders again, reform of this levy – seen as the most burdensome of all by firms – is a must. We must stop the £85,000 turnover threshold serving as a ceiling to the growth we desperately need.”

To find out more about contracting please contact Jaime on 01442 795 100 or email

You may also like to read

CBIL inflexibility could put many SMEs at risk

The APSCo is calling on the government to intervene further to ensure that businesses are able to access much-needed finance ...

Read More

SME Action Plan to help firms access government contracts

The UK’s smaller sized businesses will benefit from the government’s latest SME Action Plan, which will provide more opportunities for ...

Read More

UK SMEs concerned for recovery

Many of the UK’s smaller sized businesses have concerns about their recovery after figures show that retail figures have fallen ...

Read More

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, Contractor Umbrella, 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 Contractor Umbrella – 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, Contractor Umbrella.
  • 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.
  • Same day payments- We offer same day payments as standard providing funds are received into our account by 9am, for no additional fee.

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 or