Five wooden block lined up with simple faces drawn, ranging from smiling at one end to increasingly unhappy faces at the other
How do businesses rate HMRC? A recent survey reveals all

The annual ‘Tell ABAB’ report has been published by the Administrative Burdens Advisory Board (ABAB), providing an insight into the views of over 10,000 respondents from the small business community on their experiences of dealing with HMRC and the tax system.

What is ABAB?

ABAB is an independent board, made up of members from a cross-section of small businesses, together with professionals such as accountants and tax advisers who represent them. ABAB aim to act as a ‘critical friend’ to HMRC, providing insight from businesses with a view to simplifying the tax system and easing administrative burdens.

Key findings from the report

A key focus of the survey was on HMRC service levels. The majority of respondents reported that their experience of engaging with HMRC had either stayed the same, or got worse over the previous 12 months. All communication channels with HMRC (phone, webchat, and app) were predominantly ranked as poor.

The survey also covered a wide range of issues affecting businesses, including:

  • Awareness of Making Tax Digital (MTD) for Income Tax Self-Assessment – almost 45% of respondents weren’t aware of it at all - the ATT has a MTD information hub on our website which may help.
  • When businesses prefer tax changes to take effect from – 75% favoured new rates and rules coming in from the start of the tax year.
  • How many businesses had used Artificial Intelligence tools to answer tax queries - most hadn’t.

Underused services

The report identified a number of services and guidance tools which many businesses are unaware of, but which could help deal with some common issues, and even avoid the need for businesses to contact HMRC.

Business Tax Account

Almost half of respondents had never used the Business Tax Account. This service allows businesses to check their tax position on a range of taxes, from Corporation Tax or Self-Assessment to VAT and PAYE, as well as enabling them to submit returns and make administrative changes.

Guidance

HMRC publishes a wealth of guidance, which receives a generally positive reception in the ABAB report. Two guidance products identified as helpful, but which appear to be underused, are HMRC’s Working From Home guidance and their Check Employment Status for Tax tool.

Approximately 41% of respondents were not familiar with HMRC’s Working From Home guidance. But of those who had used it, 75% found it easy to follow. GOV.UK contains an overview of expenses and benefits for homeworking, with more detailed guidance in HMRC’s Employment Income Manual. Whilst only half the businesses which responded to the ABAB survey allow home working, these guidance products will be of use to employers who already have or are considering expanding home working arrangements for staff.

HMRC’s Check Employment Status for Tax can be a helpful tool for businesses engaging workers, and provides HMRC’s view as to whether that worker should be treated as employed or self-employed. Despite its potential value in more complex employment issues, less than 20% of respondents had used the tool. The majority of those who had used it found it useful.

Time To Pay arrangements

Over 60% of respondents were unaware of the option to pay tax liabilities in instalments if they struggle to pay what they owe. Business and individuals can set up instalment plans with HMRC under Time To Pay arrangements for a range of taxes, many of which can be arranged online.

More to come from ABAB

The findings from this report will feed into ABAB’s annual report, which is expected to be published early next year. The annual report assesses progress against ABAB’s priorities and reports their findings of HMRC’s performance to the Government. In the meantime, employers may be able to make use of some of the lesser-known services identified by ABAB’s survey to help their tax functions run smoothly. 

 

This article reflects the position at the date of publication shown above. If you are reading this at a later date you are advised to check that that position has not changed in the time since.  

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