Small firms will struggle with quarterly tax returns, says FSB

On 02/03/2016 At 6:36 pm

Category : Business News, Missed a ThameNews story?

THE Thames Valley region of Federation of Small Businesses (FSB) is concerned about proposals being considered by the Government that would require all small businesses and the self-employed to move from annual tax returns to mandatory quarterly Digital Tax Reporting by 2020.

Nicky Goringe Larkin

So concerned is the FSB that on Monday (Feb 29), it sent out a letter to all of the 21 MPs that cover the region urging them to take action. The FSB has said that its research has shown that on average, businesses already pay £3,600 a year to ensure they are compliant with their tax obligations; this is likely to increase if every one of its members is compelled to report in the proposed new way.

The FSB has said that while some businesses will prefer a digital tax model, others will struggle and that it is extremely concerned about the impact that mandating the use of digital tax returns will have on small business owners. HM Treasury and HMRC are working on the details of the proposals, but FSB believe that they have not yet fully assessed the potential impact this might have on businesses, or the economy – and in particular on those who lack the capability to complete their taxes in this way.

Commenting on the plans, Nicky Goringe Larkin, Thames Valley regional chairman at FSB, said: “The UK’s self-employed will particularly struggle with this change. We therefore want to see proper consultation with business groups and professional bodies, a clear statement of benefits to the business community and a package of support to help offset this new burden on business. Our key asks to government are:

1) No mandation should apply to smaller businesses

2) HMRC should a) publish the impact assessment and b) consult on the impact this measure will have on smaller businesses before taking forward any proposals into law

3) A consultation should be launched with the advice of trained accountants to explain tax options to available smaller businesses that are new to quarterly tax reporting.”