Making Tax Digital
THE COST TO INDUSTRY of quarterly tax updates will be billions of pounds – not hundreds of millions in savings, according to one of the UK’s most respected small business accountants.
Graham Lamont, chief executive of Cumbrian-based Lamont Pridmore, a multi-award winning practice, has estimated that small businesses each face a £1,250 bill to transition towards Making Tax Digital (MTD).
The Government plans for all businesses with a turnover of more than £10k to update tax information on a quarterly basis, with a £400m admin cost saving calculated from the move.
However, Lamont believes the 2.6 million small businesses will face an average bill of £1,250 to move to MTD – a combination of increased accountancy fees and software costs. Such a bill would set them back £3.25bn in total.
“Having assessed these documents it has become clear that these new policies will place a significant financial and administrative burden on the majority of small businesses, many of whom represent the backbone of the British economy,” said Lamont.
“It is in stakeholders’ interests to get involved and take action against these proposals, which place a heavy burden on SMEs.”
Treasury Select Committee chairman Andrew Tyrie recently warned new chancellor Philip Hammond over the lack of time being afforded to the MTD consultation.