One in four SMEs finding MTD ‘very challenging’

One in four businesses in the UK is finding Making Tax Digital (MTD) an ‘extremely’ or ‘very’ challenging issue, with concerns about the extension of the scheme to income tax.

Over a quarter of small and medium-sized enterprise (SME) business owners highlighted compliance with MTD as one of the biggest issues impacting their day-to-day operations, while a growing number of businesses said they had problems dealing with HMRC in general.

The research was conducted on behalf of digital marketing agency PracticeWeb and highlighted the value accountants can provide their clients by demystifying regulatory compliance as well as the importance of using effective communication to keep businesses informed about the latest changes to tax rules.

Over 80% of respondents said that they were ‘moderately’ or ‘extremely’ satisfied with the services offered by their accountants with half stating that they hired their accountant as a result of a personal recommendation. The main reason for changing firms was due to high fees, with 20% saying this persuaded them to look for a new accountant.

Surprisingly a third of SMEs still did not use accounting software, relying on their accountants to provide specific services rather than investing in new technology, despite continued digitisation of HMRC’s services.

This is the first time, the annual survey included Making Tax Digital (MTD) as an option for the question ‘how challenging are the following issues to your business?’, with 28% of SMEs describing it as very or extremely challenging.

Beth Steer, head of content and digital marketing services at PracticeWeb, said: ‘MTD is obviously proving to be difficult for a significant number of businesses in the UK, at a time when various factors impacting running costs and staffing levels mean they already have enough on their plates.

‘It represents both a challenge and an opportunity for the accountancy industry. For some, MTD is a costly and complicated exercise, hampered by delays and confusion along the way. But it also presents the chance to accountancy firms to convert more clients to digital processes, to take a more active role in advising them on accounting technology, and to expand to new advice and services.

‘Big changes like MTD are also a good opportunity for accountancy firms to boost client communications through things like blog posts, videos, emails, social media and so on, to make sure they’re getting the message out wherever their audiences might see it.’

For further information, please contact Andy Webb on 01932 830664 or email andy.webb@wardwilliams.co.uk.

Visit our Making Tax Digital section for more information on how we can support your business.