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Half of SMEs lost money on self-assessment errors last year

(Image credit: Image source: Shutterstock/MaximP)

Almost half of all SMEs in the UK (49 per cent) have lost money in the digital tax submission process, signalling that there is still a lot more work to be done before the Make Tax Digital initiative is completed successfully. 

This is according to a new report by cloud accountancy software Pandle, which surveyed 1,000 UK SMEs. The report says that SMEs lost money despite feeling well-informed on the recent changes to the system. 

The report also states that almost two thirds (62 per cent) of people felt prepared to the change. A fifth (20 per cent) were unaware of the changes, while half (48 per cent) feared the system is now ‘more cumbersome’. Thirteen per cent are worried about not being ‘tech savvy’ enough to navigate the system. 

To make sure the transition moves smoothly, businesses won’t be forced to keep digital records and send HMRC regular quarterly updates on tax data before 2019. It is hoped this will give SMEs enough time to prepare. 

The Making Tax Digital Plan is currently in testing.

“It’s great that HMRC is allowing SMEs extra time to adjust to the system,” said Lee Murphy, owner of Pandle. “While there’s a lot of information available on the current system, these things are never as easy in practice as in theory. It will be increasingly important for companies to understand the self assessment by 2019 when quarterly reporting is required. We conducted this survey for insight on how we could best contribute to SMEs who are struggling with the current tax system.” 

Image source: Shutterstock/MaximP