‘Blue Monday’ for firms as burdens rise

A raft of cost hikes and reporting requirements will hit smaller firms this week, according to a business lobby group.

The Federation of Small Businesses (FSB) said the measures include the introduction of Making Tax Digital (MTD) for many Vat-registered firms which it estimates will cost companies £564 each on average to comply with.

With the new personal tax year starting on Saturday, small business owners will also be required to put more aside for employees saving into auto-enrolment pension schemes.

The minimum total contribution to such schemes will rise to 8 per cent of an employee’s qualifying earnings, up from 5 per cent last year with employers required to shoulder 3 per cent of the contribution.

FSB national chairman Mike Cherry said: “This truly is blue Monday for small business owners, and it comes at a time when confidence is already in the doldrums.

“Given the burden that MTD has placed on small business owners, it’s vital that the UK government makes good on its commitment to light-touch enforcement. The software required to comply with MTD alone is setting small firms back by hundreds of pounds – and that’s before you get to the time and resource needed to navigate new software.”

Cherry said although small business owners are “absolutely committed to helping employees save”, auto-enrolment has already cost them significant amounts of time and money and the increased rate will see costs rise further. 0 ‘Confidence already in the doldrums’ – Mike Cherry