The Administrative Burdens Advisory Board annual report 2023, Better tax for better business, highlights two key areas of particular importance for the smaller business community in its engagement with HMRC:
1. Making tax digital for income tax self-assessment (MTD for ITSA): ABAB welcomes the changes announced at Autumn Statement 2023 around error correction reporting (removing the requirement to resubmit the return from the previous quarter), joint landlords, authorisation of multiple agents, basis period reform concerns and a commitment to ‘keep under review’ mandation of MTD for businesses with income below the £30,000 threshold.
Suggesting that large-scale public testing (planned for 2025) will be ‘mission critical’, given the complexities of MTD for ITSA, the report says: ‘it is vital that as many real-life scenarios as possible are thoroughly and successfully tested through the pilot. It is essential for the programme that HMRC has a thorough understanding of smaller businesses, and that this understanding is shaped by insight, research, external engagement and expertise.’ In line with the tax professional bodies’ concerns, ABAB also notes that the 2026 implementation timetable will continue to present challenges, particularly if testing reveals that changes to software are required.
2. Single customer account (SCA): ABAB reports that work has started on digital identity and authentication, with child benefit being brought into the SCA, but notes that there is no publicly available timetable on when data will be migrated from the business tax account to give individuals a fuller picture of their tax affairs. The SCA could well come into clearer focus as more taxpayers find themselves with savings income and as the reduced dividend allowance and CGT annual exempt amount require more taxpayers to report to HMRC. Businesses and individual taxpayers are still likely to need access to HMRC helplines, says ABAB, noting the move towards digital self-help options in 2023, and agents will need access to information in the SCA so they are ‘able to see the same information as the taxpayer they are supporting’.
Separately, the 2023 Tell ABAB survey of small businesses received almost 7,500 responses (more than double the usual number). Key findings included:
the off-payroll working rules, making tax digital, and changes in customs procedures have created extra burdens for business, while the benefits of greater digitalisation have yet to be realised; and
HMRC guidance for business has improved, but businesses ‘continue to express a strong desire to speak to a human adviser’; satisfaction with helpline response times ‘remains low’.
The Administrative Burdens Advisory Board annual report 2023, Better tax for better business, highlights two key areas of particular importance for the smaller business community in its engagement with HMRC:
1. Making tax digital for income tax self-assessment (MTD for ITSA): ABAB welcomes the changes announced at Autumn Statement 2023 around error correction reporting (removing the requirement to resubmit the return from the previous quarter), joint landlords, authorisation of multiple agents, basis period reform concerns and a commitment to ‘keep under review’ mandation of MTD for businesses with income below the £30,000 threshold.
Suggesting that large-scale public testing (planned for 2025) will be ‘mission critical’, given the complexities of MTD for ITSA, the report says: ‘it is vital that as many real-life scenarios as possible are thoroughly and successfully tested through the pilot. It is essential for the programme that HMRC has a thorough understanding of smaller businesses, and that this understanding is shaped by insight, research, external engagement and expertise.’ In line with the tax professional bodies’ concerns, ABAB also notes that the 2026 implementation timetable will continue to present challenges, particularly if testing reveals that changes to software are required.
2. Single customer account (SCA): ABAB reports that work has started on digital identity and authentication, with child benefit being brought into the SCA, but notes that there is no publicly available timetable on when data will be migrated from the business tax account to give individuals a fuller picture of their tax affairs. The SCA could well come into clearer focus as more taxpayers find themselves with savings income and as the reduced dividend allowance and CGT annual exempt amount require more taxpayers to report to HMRC. Businesses and individual taxpayers are still likely to need access to HMRC helplines, says ABAB, noting the move towards digital self-help options in 2023, and agents will need access to information in the SCA so they are ‘able to see the same information as the taxpayer they are supporting’.
Separately, the 2023 Tell ABAB survey of small businesses received almost 7,500 responses (more than double the usual number). Key findings included:
the off-payroll working rules, making tax digital, and changes in customs procedures have created extra burdens for business, while the benefits of greater digitalisation have yet to be realised; and
HMRC guidance for business has improved, but businesses ‘continue to express a strong desire to speak to a human adviser’; satisfaction with helpline response times ‘remains low’.
