Half of small firms counting cost of self-assessment tax errors
Half of the UK’s small businesses lost money due to self-assessment errors in 2016, according to new research.
Despite this, a similar level of businesses told the study by Pandle that there is more than enough information on the topic for when it comes to paying HMRC.
Just over 49% of small firms lost money during the submission process, which may concern HMRC ahead of the introduction of Making Tax Digital.
Ahead of the proposed changes, two thirds of those questioned said they are prepared for what is to come, although 20% were unaware of the Making Tax Digital plan.
More than one in ten people believes they lack the technical expertise to successfully navigate the tax system, while 48.3% revealed concerns that the process is set to become more cumbersome.
To support a gradual transition to the new system, HRMC is trialling the new system, while the Spring Budget from earlier this year delayed the need to submit quarterly tax data to HMRC for 3.1 million SMEs until 2019.
Providing SMEs with extra time should enable them to get to grips with the new system, so as to understand what they need to do when the transition to digital occurs.
Support services are also available that can aid businesses in their dealings with HMRC, especially those that may be facing VAT or PAYE arrears or unpaid tax.
Time to Pay services can provide advice and guidance on the best approaches to take when facing any issues, as options are available should a business act early.
One of the key issues noted by the research, is that although many businesses noted that they understand the system in theory, using it in practice was different.
Given that firms have a limited timeframe in order to implement the changes, it is key for them to act quickly and to stay on top of their finances.
By Phil Smith