Small business owners overwhelmingly against quarterly tax returns

More than 90 per cent of small business owners are against the introduction of quarterly tax returns.

This is according to new research from Simply Business, which found that just 8 per cent of respondents support the proposed new reporting regime.

The government looks to have returned to its controversial Making Tax Digital (MTD) proposals following June 2016’s Queen’s Speech.

Revived Finance Bill

The plans had been removed from the Finance Bill in an attempt to get the Bill passed in time for the snap election, but they appeared to have been revived for this Parliament.

However, the government eventually u-turned on the plans, which have been met with staunch opposition from business groups.

HMRC maintained that the new process is necessary to streamline tax practices, and insists that it will “not feel like filling out four returns.”

Costly change

But business groups have warned that the costs could be significant, particularly for microbusinesses who may currently not have the accounting software required to comply with HMRC’s proposed new systems.

The Simply Business survey found that 92 per cent of surveyed small business owners rejected the idea of quarterly tax returns.

The Finance Bill has been a site of ongoing contestation for government and business. The government’s attempts to increase Class 4 National Insurance Contributions sparked an outcry from the small business community, which saw them specifically excluded from the rewritten Bill.

What’s the latest with quarterly tax returns?

It is now understood that the government’s plans for quarterly tax returns have been shelved at least for the forseeable future. Professional accounting bodies raised serious concerns about the plans, saying that microbusinesses and SMEs were particularly unprepared for the change.

The plans had already been pushed back for some businesses by a year, but pressure groups insisted that this did not go far enough.

However, it is unclear whether the quarterly reporting system will return in future Finance Bills. Making Tax Digital is now not expected to come into force until 2020 at the earliest, although the reporting system for VAT will be fully digitised before this.

Accountancy groups have encouraged small businesses to look at their accounting processes and to move them to a system which is MTD compliant, which could involve switching accountancy providers.

Looking for self-employed insurance?

With Simply Business you can build a single self employed insurance policy combining the covers that are relevant to you. Whether it’s public liability insurance, professional indemnity or whatever else you need, we’ll run you a quick quote online, and let you decide if we’re a good fit.

Start your quote