Norfolk’s small firms face forking our hundreds for new tax software
Small businesses could face a bill of almost £600 to comply by April 1 with the government's new Making Tax Digital software.
VAT-registered small firms are ill-equipped for the imminent changes and face paying £564 for HMRC compliant software, according to the Federation of Small Businesses (FSB).
And those with a higher turnover of between £500,001 and £1 million are set to be landed with a £872 bill for MTD-compliant software. For firms with a turnover of more than £1 million, that figure rises again to £1,019.
Carl Lamb, managing director of Norwich independent financial advisers Almary Green, which offers a tax planning service, said: 'Larger businesses like ours that already have software to manage their accounting will see little change provided their record-keeping is robust.
'However, it's the smaller VAT-registered businesses who run simple systems such as using spreadsheets who will be most affected. They will need to invest in software and accounting resources to ensure they can meet the new requirements for VAT reporting.
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'My experience is that businesses are mostly aware of their responsibilities but some have left it quite late to meet the April 1 deadline so are having to commit significant resources to catch up.'
Jon Hook, managing director at tax consultancy Norwich Accountancy Services, said: 'MTD should not be seen as a huge problem for business owners. 'We live in a digital age in which a high percentage of invoicing and business banking is completed online so this is just a natural progression.
'Here at Norwich Accountancy Services we have developed our own software which is available for small business clients to use so they can remain compliant.'
FSB national chairman Mike Cherry said: 'Many firms are finding themselves on the hook for hundreds of pounds for software. At a time when small business confidence is in the doldrums and wages, auto-enrolment contributions and business rates are rising, more costs and admin burdens are the last thing they need.'