More than one in three self-employed Britons feel excluded by the tax system increasingly becoming internet-based, and worry that they lack the resources and understanding to keep up.
Announcing the finding, the Association of Accounting Technicians warned that many micro-businesses favoured traditional, offline methods - even if they are capable of settling their tax bills online.
Pointing to the 39% of such traders who claim to be excluded by the taxman’s digital system, the association said more needs to be done to stop them feeling “left behind,” especially if the UK expects more start-ups to thrive.
Completing a tax return is “too complicated” for a fifth of micro-businesses, found AAT, and solutions such as accounting software and free downloadable resources aren’t even on the radar for more than 60% of such traders.“We do have to cater to the fact that not all small business owners are digitally as engaged as others,” said Adam Harper, a director at the group.
“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.”
In line with his comments, one in 10 of the smallest businesses said they opted for a paper tax return, despite the incentive from HM Revenue & Customs of a later deadline for electronic returns.
Of those choosing the paper format, almost three quarters of the traders – all of whom had either no employees or just a handful – said they were capable of doing it online, but preferred the traditional approach.
Shown the findings, the Low Incomes Tax Reform Group said that the government had “wholly underestimated” the extent of the difficulties experienced by many small and micro businesses in having to go online for tax purposes.
The figures follow a tax tribunal’s ruling that HMRC broke the law by requiring all firms to submit their VAT returns online, without providing an exemption for those who were unable to, due to factors like age, disability or broadband access.
to the Daily Mail, Caroline Abrahams, a director at Age UK, reflected: “The
provision of government services should not be inclusive and recognise the
needs of disabled and older people.”