A variety of costs and tax reporting measures come into force today (1 April) in what some are calling "Blue Monday".
Businesses will now have to submit tax reports digitally and there are new auto-enrolment pension costs. However, some businesses in England will benefit from a cut in business rates. Software required to submit tax digitally costs an average of £564.
Pointing out that small business confidence is already low, the Federation of Small Businesses (FSB) said: "This truly is blue Monday for small business owners."
Despite the reduction in business rates for some firms, local authorities in England are expected to generate £25 billion in business rates for this financial year, an increase of £205 million.
Mike Cherry, chair of the FSB, said: "Business rates is an unfair, regressive tax that hits small firms before they've made their first pound in turnover, let alone profit.
"The help won from government to support those hurt most by the 2017 revaluation is now falling away, leaving many small businesses with a 20% hike to their bills, plus an inflation-linked increase."
The FSB claimed that two million small firms would incur higher costs as a result of Making Tax Digital, however, HMRC insisted that it would be 1.2 million.
A spokesperson for HMRC said: "The official impact assessment estimated that the average cost to transition will be £109 and then £31 per year on average, but some providers are offering free software.
"These estimated costs don't consider the wider benefits that businesses will see through improved record keeping, better business management and a streamlined, digital experience, nor the fact that most businesses will be able to claim their software costs against their tax."
Commenting on the 3% to auto-enrolment pensions rate, Mike Cherry said: "Though small business owners are absolutely committed to helping employees save, auto-enrolment has already cost them significant amounts of time and money. When the 3% rate hits, the costs will be greater still."