What’s the biggest barrier to small business’ resurgence and growth?
You might think at first sight that it’s probably a faltering economy. To some extent you would be correct, but as accountants Steven Glicher has often thought that the greatest barrier to small business growth and prosperity is confidence: confidence not just in the economy, but also confidence in the tax system that governs the economy.
So we weren’t altogether surprised when we read the findings of the latest survey from the Association of Accounting Technicians (AAT).
The AAT found that two-fifths of the UK’s smallest businesses voiced concerns about what appears to be HMRC’s overly-aggressive push towards a digital taxation system. These businesses stated that they felt excluded and disengaged from the process, and are therefore calling on the government to simplify its digital tax processes.
The AAT’s survey of 1,000 self-employed people and firms with less than ten employees, found that 39% were finding it difficult to connect with HM Revenue and Customs’ (HMRC) online demands due to both a lack of resources and understanding of the system. Moreover, one-in-five (20%) of respondents also voiced concerns about the method for completing an electronic tax return. They argued that the new system is too complex. This problem was compounded by the relative size of the business, as 21% believed larger businesses had an unfair advantage due to having more resources to spend on specialist filing support.
Adam Harper, director of professional development at the AAT, commented on the latest survey, stating:
“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 government’s real-time information system for Pay-as-you-earn, (PAYE) schemes also 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 has also been re-enforced by the Low Incomes Tax Reform Group.
Anthony Thomas, chairman, Low Incomes Tax Reform Group, commented:
“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.”
If your small business is worried about the increasing push towards a digital taxation system and is finding the transition to real-time information system tough going, then why not speak to the accountants at Steven Glicher?
We can file all of your year-end and in-year returns on your behalf with HMRC and provide you with P60s to distribute to your employees. We can help you manage the migration to RTI and all the reporting changes that it involves, leaving you to concentrate on managing and growing your business. If you would like clarification on this matter or would like to discuss any other issues relating to small business tax advice, then give Steven Glicher accountants a ring on 0161 485 8007.