The influential cross-party Treasury Select Committee in Parliament has warned that the Government’s Making Tax Digital programme could be a disaster for UK small businesses.
In its report on plans to digitise tax records and reporting, the body recommended delaying implementation until 2019-20 and supported FSB’s proposal to align the exemption threshold to the VAT registration limit of £83,000.
Mike Cherry, National Chairman of FSB, welcomed the findings. “This report is a damning indictment of the Government’s mandatory tax plans, and ministers must listen to it,” he said.
“The voices of the UK small business community and MPs from all parties now speak as one – the proposals as they stand put our economy at risk. Ministers must heed this report before publishing draft legislation.
“The estimated average cost of implementing the mandatory aspects of Making Tax Digital will be £2,770 per business,” added Mr Cherry. “At a time when FSB research shows that investment and growth intentions are subdued, the Government should be looking at how the tax system can support small firms to boost the economy rather than harming entrepreneurship.”