An overwhelming majority (79%) of SMEs and tax agents believe that the move to Making Tax Digital (MTD) for Income Tax will increase the time spent and costs incurred in keeping records. Over half (58%) stated that this increase will be significant, according to the latest survey into HMRC by the Administrative Burden Advisory Board (ABAB).

Only 4% of respondents felt that the change would reduce costs or time.

However, there were high levels of awareness about the upcoming changes with 80% of respondents knowledgeable or somewhat aware about the new rules.

Currently HMRC plans to introduce MTD for Income Tax from April 2024 for self employed and landlords with income over £10,000.

There were also calls for HMRC to produce guidance well in advance of introduction of the new rules, with many wanting full details at least two years before the scheme goes live, while 43% they wanted to be fully informed of the process a year before launch.