10 October, 2016
News this week is the declaration by the taxman of its intention to spare the smallest businesses the burden of quarterly tax reporting. But will this move lead to some unexpected problems when it comes to smaller companies securing credit?
This week, HMRC declared that the smallest businesses – those with turnover under £10,000 p.a. – would no longer have to report quarterly on their tax status.
According to the taxman, its move could remove this bureaucratic burden from around 1.3m unincorporated businesses and landlords.
And there could be many more businesses being let of the hook. The consultation period with accountants and businesses continues to November, and there’s every chance that more categories of business may also be spared the job of filing quarterly tax statements.
For many businesses chiefs, this news will be greeted with glee. Not only will it save their time, it might also reduce their company running costs, as most leave this task to their accountants.
Recent research suggests most small business still use external accountants. According to AccountingWEb, the large majority (86%) of businesses pay an accountant. The main tasks are to prepare and submit tax returns (84%), and help with complex tax matters (70%).