Making Tax Digital (MTD) is an ‘extremely’ or ‘very’ challenging issue
More than a quarter of small and medium-sized enterprise (SME) business owners cited 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.
Despite the continued digitisation of HMRC’s services, 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.
For 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.
More than a third (35%) of business owners said the online competition was very or extremely challenging for them, making this the top challenge for the second year running, highlighting the importance of online marketing and maintaining an active online presence.
Financing (34%) and cashflow (34%) came in as the joint second highest challenges, while dealing with HMRC (33%) came a close third.
There were also signs that regulatory compliance was becoming more of an issue for businesses with an 8% increase in respondents stating this was particularly difficult with a third (32%) citing red tape as a problem.
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.
If you need a fresh look or even if have not even started, on how this impacts you then contact [email protected]