Digital tax system leaves UK's smallest firms feeling "excluded"

13th November 2013 | News

The Government is facing calls to simplify its digital tax processes, after two-fifths of the UK’s smallest firms voiced concerns about feeling excluded from the system.
 
According to a recent survey by the Association of Accounting Technicians (AAT) of 1,000 self-employed people and firms with less than ten employees, 39 per cent were finding it difficult to connect with HM Revenue and Customs’ (HMRC) online demands due to a lack of resources and understanding of the system.
 
One-in-five (20 per cent) respondents also voiced concerns that the method for completing an electronic tax return was too complex, while 21 per cent believed larger businesses were at an advantage due to having the resources to spend on specialist filing support.
 
Adam Harper, director of professional development at the AAT, said: "It’s clear that some find conducting tax affairs online time-consuming and daunting.

"This has caused many micro-businesses to stick to old methods that they are more comfortable with."
 
The real-time information system for Pay-as-you-earn (PAYE) schemes appears to have added further complexity to HMRC’s digital tax system, at a time when an easing of obligations is necessary to nurture an entrepreneur-friendly culture for start-ups to thrive in the UK, claims Harper.
 
"No business should feel digitally excluded, and more needs to be done to engage those most at risk of being left behind," he added.

The AAT’s call for simplification to the digital tax system was further echoed by the Low Incomes Tax Reform Group.
 
Anthony Thomas, chairman, Low Incomes Tax Reform Group, said: "Government has wholly underestimated the extent of the difficulties experienced by many small and micro-businesses in going online, whether by reason of age, disability, geographical remoteness, or simply through choice.
 
"When combining the AAT findings with our own research, the government’s aggressive timetable to becoming digital by default becomes even more of a challenge and a real worry to those who are disengaged."