The Federation of Small Businesses (FSB) commissioned an external economics consultancy to provide an independent estimate of the cost 
to a UK small business of Making Tax Digital. These calculations showed that the average cost would be £2,770 per business.
There is considerable demand from businesses and their representative bodies that there should be a full pilot of the mandatory quarterly tax reporting which forms a mainstay of HMRC’s plans. The FSB wants to see comprehensive testing of the programme so as to minimise the disruption it will cause to small firms at a time as it states the costs of doing business are at their highest since the beginning of 2014.
There is a view that HMRC has significantly underestimated the true cost to small businesses of quarterly tax reporting.
Unlike the figures posited by HMRC, the FSB’s calculations were conducted externally to ensure they were independent, objective and robust. The onus is now firmly on on HMRC to explain why their assumptions remain so out of sync with those of leading business and accountancy groups.
The Treasury Select Committee recently added its weight to calls for review of HMRC’s Making Tax Digital programme to avoid it becoming “a disaster” for small businesses.
Our earlier blog on Making Tax Digital proposals can be read here. For now it’s a case of watch this space.
