Online forms are too taxing for small firms

The Forum of Private Business (FPB) wants HMRC to take a more flexible approach to proposals which would see businesses forced to fill in tax returns online.

In September 2005, the FPB surveyed members and found that the majority of respondents did not use the online services offered by HMRC. Sixty-one percent of respondents to the survey said that they don't use online VAT returns, 71 percent said they don't use online corporation tax returns, 40 percent don't use PAYE online and 58 percent don't use online self-assessment.

Andy Mowlah, Research Analyst at the FPB, said members' reasons for not wanting to use those services were varied.

He said: "Some firms do not have the facilities to use the online services, while others have encountered problems in submitting returns and have been deterred from using the service again.

"Our research shows that information communication technology is one of the biggest areas of investment for our members, they do want to be up to date with the latest technological advances. However, many of our members simply found the system to be unusable."

Investment

A survey conducted by the FPB and the Financial and Leasing Association in November 2005 showed that smaller businesses had invested more in IT over 12 months than any other asset.

Mr Mowlah says HMRC, which plans to make it compulsory to fill in tax returns online by 2010, should encourage a natural progression to online services rather than forcing the hand of small business.

He said: "It is clear that HMRC should keep the way in which businesses complete their tax returns flexible, while improving their online service to encourage more small businesses to use it."

Rachel Andrews is Financial Director of Andrews Computer Services in Hemel Hempstead who specialise in IT and advice in the area of tax returns and PAYE self assessment online. She says the Government has tried to make the online systems more user friendly.

Ms Andrews said: "HMRC has tried hard to make the system easier to use. With a little bit of encouragement small businesses could quite easily be persuaded to use it.

"The Government should roll out financial incentives, the like of which they introduced for on line PAYE self assessment, across the board."