A new study suggests that almost half of small and medium-sized enterprises (SMEs) believe that the Government’s Making Tax Digital (MTD) project will overcomplicate tax.
The study, carried out by cloud software company Pandle, quizzed 1000 SMEs and found that more than two thirds (63 per cent) of firms are ‘prepared’ for the change, which will begin to be phased in from April 2018.
However, 48.3 per cent of respondents said that they were worried that MTD would overcomplicate their tax affairs.
Meanwhile, an additional 13 per cent of businesses said that they do not believe they are ‘tech savvy’ enough to navigate MTD systems.
Once introduced, Making Tax Digital, a mandatory tax overhaul currently in its testing stage, will see the end of paper tax returns and the introduction of quarterly digital reporting to HM Revenue & Customs (HMRC).
The project is currently under trial, but will officially roll out between April 2018 and April 2020, depending on your circumstances and reporting obligations.
An independent analysis of how much the transition to MTD will cost for the average user has suggested that businesses should expect to pay around £2,770 – a figure far higher than the £280 initially estimated by the Government.
However, this analysis, which was carried out by the Centre for Economics and Business Research (CEBR), has stressed that costs will “vary considerably” for businesses of different shapes, sizes and structures. It is important to seek situation-specific advice.