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Making Tax Difficult

The Federation of Small Businesses (FSB) has calculated that the Making Tax Digital initiative, which the Government believes is ‘making is easier for individuals and businesses to get their tax right’ will actually increase the admin burdens for small businesses.

Small businesses are spending on average £4,100 and 52 hours a year on tax compliance.  The majority of the costs are attributed to the need to purchase or subscribe to Making Tax Digital (MTD) compatible software.  Many business owners aren’t computer savvy and therefore they are spending a big proportion of their time learning new processes rather than concentrating on growing their business.  If you add in their lack of awareness that surrounds tax incentives I start to wonder if the Government are in collusion with the software companies. Not applying the correct reliefs could see you paying more in tax than you should be after all.

We have all seen the adverts on TV, where software companies are vying for your business and telling you that using their software will see you spend less time on their accounting and more time on running the business.  For a business owner who isn’t that savvy it looks great, take a photo of a receipt, raise an invoice and voila your accounts are done and ready to submit when the truth is no-where near this scenario.

There is no way a computer program is going to sign post you towards relevant tax reliefs and investment incentives; this is something a qualified accountant keeps up to date with and applies in the best way for your business.

Don’t get me wrong, software is great for collating the information between businesses and their accountants but that’s where it needs to end.

We provide data capture software free of charge to our clients, we link their bank accounts to our accounts production software, then and only then do we conduct a tax analysis, apply reliefs, and advise you how you can save tax going forward.

Maybe we should change MTD to mean Making Tax Difficult.

You can read more about MTD from HMRC here.

If you want more impartial advice and guidance please CONTACT US for a free no obligation chat.

 

Do you want to know how we can help you?

We would be happy to discuss your requirements and put the most appropriate package together for you.

 

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Adam Hiscock is licensed and regulated by AAT under licence number 1001350.

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