HMRC performs U-turn on quarterly digital tax returns for small businesses

If you run a small business and have been having sleepless nights about the impending threat of online tax filing, then Steven Glicher accountants can bring you a little good news for once. You can now sleep easy as HM Revenues and Customs (HMRC) has bowed to pressure and confirmed that small businesses will still be able to file their tax returns online or via telephone.

Why has the HMRC backtracked on its widely-publicised digital plans? Well, more than 100,000 people signed a petition calling on the Government to shelve plans for quarterly self-assessment tax returns. It also appears that the tax authority discovered that 40 per cent of self-employed workers were struggling to get to grips with HMRC’s digital self-assessment tools. Its own figures showed that two-in-five self-employed workers were either unable to use the internet or required significant assistance to use government services online.

So what does this news mean for small businesses? Well, David Gauke, Financial Secretary to the Treasury, confirmed that those businesses which are really struggling to “go digital” will not have to, and will be able to file their tax affairs over the phone. However, any business registering its self- assessment account by phone will be required to answer a series of questions about their tax affairs – from revenues to costs – over the phone.

Writing in a national newspaper, Mr Gauke said:

“Going digital will not be an option for some people.”

“Businesspeople who genuinely can’t use digital tools – perhaps because they can’t access broadband, or don’t own a computer or smartphone – will be offered alternatives, like nominating someone else to update their information for them, or giving information by phone. So there’s nothing for businesses to fear in this new system.”

What ‘information’ HMRC will need taxpayers to share over the telephone is still as yet unclear. Whatever that information may be, small businesses and accountants have expressed some concerns about the long-term viability of any quarterly account telephone filing system as HMRC’s own figures confirm that over the last 12 months it has failed to answer 18 million calls.

Is that the only good news? Has HMRC also relented on its plans to commit to filing quarterly tax returns? Well, it would appear not. HMRC’s plans to implement a regime where taxpayers must submit quarterly tax returns, as featured in the ‘Making Tax Digital’ document, will still go ahead. By 2020 all self-employed professionals and SMEs will have an online tax profile similar in nature to an online bank account. Treasury sources claim ‘common sense will prevail’ to ensure the changeover is not ‘burdensome’ for taxpayers.

The good news for self-employed workers, landlords and small business owners is that for the time being at least, they will still have the option of filing their tax return online or by telephone, rather than digitally.

News / Blog


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