Simply Business - Insurance for your business

Call Us0333 0146 683
Our opening hours
Knowledge centre

65 per cent of small businesses lack necessary tax software

1-minute read

65 per cent of small businesses lack necessary tax software
Josh Hall

Josh Hall

23 February 2017

Some 65 per cent of small businesses don’t have the accounting software they need to deal with the government’s incoming tax changes.

This is according to a survey by UK200Group, which found that the majority of small businesses don’t use the tools they will need to keep up with proposed changes to the Self Assessment system.

The introduction of Making Tax Digital

The controversial 'Making Tax Digital' scheme will see a radical change in the way in which businesses report their earnings to HMRC from next year.

Under the proposals, firms will be required to report to the taxman on a quarterly basis, and paper returns will be scrapped for almost every Self Assessment taxpayer.

Small businesses unprepared

But the survey suggests that small businesses are dramatically ill-equipped to face the changes. According to the UK200Group, around 16 per cent of small firms still use the ‘shoebox’ method, under which they do not record transactions at all, but simply hand receipts to their accountant.

Meanwhile more than a quarter use spreadsheets or similar basic solutions, but will be forced to switch to full-blown bookkeeping solutions under the Making Tax Digital plans.

UK200Group’s Richard McNeilly said: “The shoebox method users will have to learn how to keep records, invest in software, and then spend time inputting the data they collect into it.

“Making Tax Digital represents the single most significant change to the UK’s system of taxation in recent times, and many of our smaller business clients are simply not ready for it.

“If the Revenue stays committed to having businesses report and pay tax digitally by 2018, small firms have only a short time to update their systems.”

Is your business insured?

We have 800,000 UK policies plus a 9/10 satisfaction score. Why not take a look at our expert business insurance options - including public liability insurance and professional indemnity - and run a quick quote to get started?

Start your quote

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

Find this article useful? Spread the word.


Keep up to date with Simply Business. Subscribe to our monthly newsletter and follow us on social media.

Subscribe to our newsletter


Popular articlesBusiness resources from FarillioGeneral businessGuestInsuranceLandlordLandlord resources from FarillioLegal and financeMarketingNewsOpinionProperty maintenanceTradesmanCovid-19 business support hub


6th Floor99 Gresham StreetLondonEC2V 7NG

Sol House29 St Katherine's StreetNorthamptonNN1 2QZ

© Copyright 2021 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.