Digital scheme widens but many firms still frozen outby
The government has expanded access to its Help to Grow: Digital scheme, offering discounts of up to £5,000 on digital technology, but questions remain about the exclusion of small unincorporated businesses and the limited number of participating vendors.
From 25 July 2022, incorporated businesses with at least one employee could be eligible for the government’s Help to Grow: Digital scheme, which offers discounts for small businesses looking to adopt digital accounting, CRM or eCommerce tools for the first time.
Previously, only businesses with more than five employees were eligible for the scheme – a restriction that campaigners from the accountancy, tech and small business world felt had undermined its performance.
The move hikes the number of eligible businesses by 760,000 to 1.24m, and while some commentators welcomed the move, others felt the expansion had missed an opportunity to help the UK’s smallest businesses, particularly with the upcoming mandation of Making Tax Digital for income tax self assessment (MTD ITSA).
The Institute of Chartered Accountants in England and Wales (ICAEW) welcomed the government’s actions as a “positive step that will allow the smallest businesses to receive much-needed help in harnessing technology to improve productivity”.
“We look forward to continuing to work with the government to further improve the scheme to address additional business needs, particularly around providing help for costs beyond licensing, and further increasing the scope of approved software and vendors,” commented its head of tech policy, Esther Mallowah.
Paul Aplin, tax expert and Office of Tax Simplification (OTS) board member, commented it was: “Good to see the Help to Grow scheme widened, but sadly still restricted to businesses registered at Companies House – small unincorporated businesses remain out of scope.”
“Unincorporated businesses are being forced to buy software to comply with MTD ITSA, but no help for them,” added tax writer Rebecca Cave.
To qualify for the discount, businesses from any business sector, but must meet all four of the following criteria:
- be a business based in the United Kingdom registered with Companies House or a registered society on the FCA Mutuals Register
- have at least one employee who is not an owner, up to a maximum of 249 employees
- have been actively trading for over 12 months and have an incorporation date of at least 365 days prior to application, and
- be purchasing the approved software for the first time.
Eligible businesses receive a one-time financial discount towards the purchase of one approved software product up to a maximum of £5,000 that covers 12 months’ worth of “core costs”.
Businesses can choose to apply the discount in one of the following software product categories: digital accounting, customer relationship management (CRM) or eCommerce – the latter of which is a new category added to the scheme this week. AccountingWEB understands that the discount is a one-time only offer, with the ability to mix and match licences from different categories not available.
At the time of writing, only three vendors appear in the digital accounting software section of the scheme’s product pages: Sage, QuickBooks Online and Crunch, with other software houses in the industry complaining privately about red tape, an unwieldy procurement process and opaque selection criteria imposed by the government.
“The poor selection of suggested business tools for CRM, accountancy and e-comm solutions is a major inhibitor for any accountant worth their salt to actually get onboard with this scheme,” commented John Toon, tech strategy lead at accountants Beever and Struthers. “The ethical conundrum is thus – take free money and provide bad advice, or provide appropriate, reasonable advice for a fee.”
The government also announced that a one-to-one advice service for SMEs on how best they can adopt digital technology will be made available later in the year. Applications for advice platforms to partner with the scheme are open from today and the advice service will go live in the latter part of 2022.
No figures have been made publicly available about the take-up of the digital scheme. AccountingWEB recently asked how many discount vouchers had been applied for and approved, but the department for Business, Energy and Industrial Strategy (BEIS) stated it would not provide the figures at the moment citing a “public interest exemption”. Information will apparently be available on the gov.uk site later this year.
The digital scheme’s sister course, Help to Grow: Management, was launched back in August 2021 but by February 2022 had only enrolled approximately 2,500 people, a tenth of its target of 30,000.