Real Cost for Small Businesses in Making Tax Digital

Form the next tax year, smaller businesses are encouraged to keep digital records of their financial information such as income and expenses.

A survey of accountants reveal nearly half of them think that this will cost small businesses somewhere between £200 and £500 and 27% think that it would be between £500.00 and £1000,00 while 9% estimated the cost at more than £1000.00.

HMRC’s own estimate is around £280.00 up to nearly £3000.00 per business. In giving evidence to the Treasury Select Committee back in October about the potential costs and savings expected to be generated by making tax digital, Mike Cherry, policy director of the Federation of Small Businesses, suggested that making tax digital would cost businesses £2770.00.

When it comes to the huge variation of cost estimates, one explanation is the lack of information and detail available on exactly what making tax digital entails. The most pressing information being held back by HMRC, two-thirds (65%) of accountants surveyed wanted to find out which of their clients will be exempt from making tax digital. The making tax digital exemption threshold is expected to be revealed at or after the Budget this March.

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If you have any queries on how your business should fulfil this compliance requirements, you can contact KVS Accountants. We are accountants for small businesses in Putney, Chelsea, Fulham, Hammersmith and Barnes

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