Micro businesses deterred by digital tax system - LITRG Press Release

Published on 14 October 2013

More than a third of the smallest businesses feel the digitisation of the tax system is leaving them behind, according to a survey of 1,000 micro businesses carried out by the Association of Accounting Technicians (AAT). The findings add to the results of the LITRG report on Digital by Default, published in May 2012.

The AAT surveyed 100 self-employed and micro businesses with less than 10 employees and found that 20% regard the process of completing a tax return as too complicated and in need of simplification; 21% felt that larger businesses are at an advantage as they have more resources to spend on specialised support. The introduction of RTI is also felt to have put pressure on small businesses as these changes are costly, both financially and administratively; the move to bring everything online is just another challenge. Despite a later deadline for the submission of electronic returns, 10% filed using the paper filing method, and of those, nearly three quarters were capable of doing it online but preferred the more traditional approach.

49% of respondents identified the HMRC website as the most common way to seek help with their business tax affairs, but nearly 61% have never used or considered using technical solutions (such as basic accounting IT packages and free downloadable resources) to conduct their tax affairs online.

Anthony Thomas, Chairman of the LITRG said:

“The findings come as no surprise. We in LITRG believe that 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.” 

The AAT's press release can be found here.

The LITRG’s Digital by Default report can be found here.

(14-10-13)

Contact: Anthony Thomas (please use form at http://www.litrg.org.uk/ContactUs)