THE UK'S MICRO-BUSINESSES and the self-employed are struggling with the digital tax system, according to research from the AAT.
A survey of 1,000 self-employed and micro businesses with less than ten employees, showed more than two thirds (68%) think the tax system is becoming more digitally focused and just under one third (29%) have begun using third-party accountancy support to cope.
Changes such as real-time PAYE have seen 39% of micro-businesses and the self-employed feel excluded by a digital-based tax system and lack the resource and understanding to keep up, according to the findings.
More than two-thirds (68%) believe the system is becoming more digitally focused, while just under one-third (29%) have begun using third-party accountancy support to cope. One in five (20%) regard the process of completing a tax return as too complicated and should be simplified, while the same portion believe that larger businesses are at an advantage as they have more resource to spend on specialised support.
Director of professional development at AAT Adam Harper said: "It's clear that conducting one's tax affairs online is a time consuming and daunting process for some and this has caused many micro-businesses to either stick to old methods that they are more comfortable with or seek third party support.
"While reporting digitally and in real time will be hugely beneficial in the long-term; we do have to cater to the fact that not all small business owners are digitally as engaged as others. Many are capable of filing online but choose not to, and the majority don't use technical solutions that have been designed to make their lives easier."
You may also like
If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.
In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.