The results of a recent annual survey by the Administrative Burdens Advisory Board (ABAB) indicate that the administrative burdens on small businesses remain a significant concern and they continue to increase year on year. 

With over 7,500 survey responses (the highest annual number to date), small businesses told ABAB that the additional work involved in complying with Making Tax Digital (MTD), the changes in importing and exporting procedures and the off-payroll working rules, have all contributed to increasing administrative costs.  

Many of the survey results around communication and engagement with HMRC will not come as a surprise to readers. In most areas, respondents felt that HMRC services had either stayed the same or got worse. Small businesses also continue to struggle with the legislative burdens of tax compliance, with only 2.1% of respondents considering that these have improved over the last 12 months. 

Disruptions were felt in all areas of businesses, with over half of VAT registered respondents saying that they had been required to move to new MTD-compatible software for record keeping and return submissions, increasing both time and compliance costs. However, more positively four out of five businesses felt that they were prepared for MTD for VAT. 

Elsewhere, the survey found that nearly two thirds of respondents were not aware of HMRC’s Time To Pay (TTP) arrangement. This is disappointing, as in a time of economic uncertainty where businesses are struggling to pay their bills, a TTP can help spread tax bills over a longer period of time and in a more affordable way. 

There were some positive points from the survey, with many taxpayers finding it easy to read and understand HMRC’s written communication. Over 40% said that HMRC’s written correspondence was ‘easy’ or ‘very easy’ to read, with only one in six thinking it was ‘difficult’ or ‘very difficult’. There were also positive comments on HMRC’s use of YouTube videos.  

The results of the survey will be used to inform ABAB’s engagement with HMRC and form part of their Annual Report for 2023 to the Financial Secretary to the Treasury which is due to be completed in December. 

This article reflects the position at the date of publication 18 October 2023. 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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