Businesses say complex pricing models are a main concern when choosing Making Tax Digital (MTD)- compatible software.
The latest HMRC research into MTD software shows that businesses find checking and comparing costs "confusing", particularly for those looking for specific features, such as managing payroll or pensions.
Businesses with low financial complexity and low digital confidence were especially wary of software costs, with one participant saying that switching software "doesn't feel worth it".
Furthermore, many businesses felt "overwhelmed" when deciding between different software packages. Some also felt they had made the wrong decision after using their chosen software for MTD for VAT.
Ease of use was a priority for all types of businesses. Taxpayers wanted their software to be as easy or easier to use than their previous system. They also wanted the transition to new software to be as quick and simple as possible.
The research also shows that businesses using an accountant or tax adviser found this transition smoother:
"Participants who heard about MTD through an accountant or could have ongoing conversations with one were more likely to take action to identify relevant options sooner."
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