HMRC’s New Proposals Could Affect Small Businesses

Posted on 14 June, 2016 by Editor in Chief

New controversial plans proposed by the government include the requirements for firms to submit quarterly tax updates rather than the annual tax return. This could see an increase in effort, time and costs of operating businesses, especially for SMBs and those who are self-employed.

HMRCs New Proposals Could Affect Small Businesses

Another Proposal

According to the government’s 2015 publication, ‘Making Tax Digital, digital tax accounting will be implemented by 2020 for the self-employed, landlords and most businesses. This will allow HMRC to gather tax more effortlessly and precisely. A recent survey commissioned by the ICAEW saw that 55% of businesses supported a general move towards on-line tax submissions.

Many people feel it is imperative for the government to make the digitalisation as simple and smooth as possible for small businesses & the self-employed who keep records the very traditional way, on paper If there is no support or digital assistance for those who are not digitally savvy, this be another worry added to the smaller firms and the self-employed.

Quarterly Tax

The small business community has a petition with over 100,000 signatories calling for the government to scrap their plans for multiple yearly tax submissions. Despite the outcry, it is looking likely the proposed changes will go ahead. The HMRC will determine to follow through with the proposals after the EU referendum.

Labour and Co-operative MP for Nottingham East, Chris Leslie, is concerned especially about the audit costs this may involve, and how this could “contribute towards the government’s goal of reducing compliance costs by £400m by 2020.”

With the ever increasing pressure on small businesses, is the new proposal another chore added to their on-going business problems?

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