An independent analysis of how much reporting to the taxman will cost the average business has come back with a figure three times greater than the government’s.
Commissioned by a small business group, the Centre for Economics and Business Research found that the quarterly reporting regime will cost £2,770 per business and not the estimated £280 by the Government.
Although the actual cost to individual businesses will vary considerably depending on the final shape of the regime.
The Federation of Small Businesses (FSB) believe the figure factored by the HMRC is prompting the centre to assume a decrease in the time spent on the reporting.
“The FSB think that with MTD, businesses might spend three times as much time on their tax obligations as they currently do. This could cost them around £3,000 a year in time, salaries and accountants’ fees,” said committee chair Andrew Tyrie MP.
“HMRC think that they will spend less time, leading to a small net saving. A comprehensive pilot should shed some light on which assumption is closer to reality.” Mr Tyrie has written to the Administrative Burdens Advisory Board, asking them to investigate the true cost.