Digital tax overhaul could generate £46 billion for UK economy
The move to digital services will have major productivity benefits for SMEs
Government-led digital tax initiatives such as Making Tax Digital (MTD) could boost the UK economy by 6.9 billion a year, or 46 billion over a five-year period.
So claims research by Volterra Partners - commissioned by Intuit Quickbooks - which said that although the update to tax laws could be a struggle for businesses at first, it's likely to have a snowball effect as they rush to implement new digital tools in order to be compliant.
Volterra Partners explained these so-called spill-over benefits are likely to drive significant increases in SME productivity, which will translate into monetary benefits too. It predicts this to be around 18,000 a year for businesses with between 10 and 29 employees.
MTD will have a large impact on sole traders, the company has predicted, with an annual gain, on average, of 1,900.
Businesses in London and the south-east are most likely to see the biggest gains, while the manufacturing and retail sectors will be the most positively affected verticals in the UK.
"Now is the time for small businesses to embrace digital with unabated optimism. Today's report highlights that a digital-led approach will be transformational for small businesses, who are the backbone of the UK economy," said Chris Evans, vice president and UK country manager at Intuit QuickBooks.
"For those businesses, the transition to digital will not be without stumbling blocks. However, it presents a huge opportunity to streamline operations, drive efficiencies and simplify tax. It will enhance cash flow management and allow them to get paid faster and access capital to grow, powering prosperity across the UK."