Accountancy software supplier Sage (SGE) looks likely to sidestep any major fallout from the HMRC’s delayed making tax digital scheme. The original plan from the Government’s tax authority would have forced the smallest businesses and sole traders to start online quarterly reporting from April 2018.

That plan has now been pushed back to April 2019 at the earliest amid outcry from MPs and businesses. The very smallest UK businesses, those operating below the £85,000 per year VAT threshold, will now be made exempt from enforced digital tax reporting beyond basic VAT declarations.

Sage concentrates on providing a suite of accounting and tax tools for small and medium-sized businesses above the VAT level. It had planned to offer a so-called ‘freemium’ entry level module of basic tools for smaller operators. Freemium models provide a low level of tools for free, with more features available on a sliding fee scale. Sage may well now ditch its freemium strategy, effectively stripping out a marketing cost.

Sage’s bigger challenge is to accelerate its underlying growth beyond the mid-single digit levels of the past. Shares has previously pointed out that firm progress on plans to accelerate growth is key to holding on to a price to earnings (PE) rating above 20.

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