By Phil Harris
Harris & Co
BACK in 2010, the new Coalition Government promised us a 'bonfire of the quangos'. Despite that promise, little progress seems to have been made with reducing the burden of red tape on businesses, especially small businesses.
Tax is a particular problem area for small businesses - the amount of tax regulation has dramatically increased over the past decade or so. In the early 1990s the average Budget was 2,500 pages long. The last 13 Budgets have each averaged over 12,000 pages long!
Recent research from the British Chambers of Commerce (BCC) and Avalara show that the vast majority of UK businesses feel the burden of complying with tax regulations has escalated in recent years, with three in four saying the cost had increased compared to five years earlier.
According to the survey, 64 per cent of businesses said that VAT created the biggest administration, a finding mirrored in the responses of firms across all sizes and sectors. The BCC is urging ministers to reduce the complexity of current tax regulations and facilitate additional support from HMRC for companies trying to stay compliant, with a particular focus on SMEs.
As a result of the ever-increasingly complex tax regime, and HMRC's increasing willingness to apply stiff penalties for those who get it wrong, many SMEs are turning to The next big stage in Making Tax Digital for VAT registered businesses hit in April this year and many SMEs have struggled to learn double entry bookkeeping and then how software like Xero or Quickbooks handles this. Compliance with MTD has been really hard for most SME's and there is an increasing trend of SMEs outsourcing this work to accountants like us who are very familiar with cloud based packages.
For more information of how we can help your tax compliance process, contact Harris & Co on 01604 660661 or visit www.harrisandco.biz