Nearly half of self-employed workers and small business owners are losing confidence in HMRC, according to data published by the tax office. But they are doing some things right, according to small business owners.
Small Businesses’ positive ratings of confidence decreased since 2021, while their positive ratings of HMRC treating their business fairly increased.
The study shows that confidence among small businesses has dropped year-on-year. In 2021, 63% of small businesses perceived HMRC in a positive light, but this dropped to as low as 54% in 2022.
Some 35% of respondents expressed concern that HMRC may be wasting money, which is in line with findings from last year. Question marks were also raised by small business owners over the effectiveness of HMRC, with only half (54%) agreeing that it is an effective organisation.
However, 74% of small businesses spoke positively of their experience of dealing with HMRC over the phone. However, Qdos CEO, Seb Maley, said this “merely papers over the cracks.”
Small business owners question HMRC’s use of taxpayers’ money
Maley said, “This research paints a damning picture of how self-employed workers and small business owners perceive HMRC. With nearly 4.3m self-employed people in the UK, it suggests that nearly half don’t have confidence in the tax office.
“I can’t help but feel that HMRC has created a rod for its own back. Time and time again, HMRC launches tax investigations into innocent freelancers and contractors, leaving them with staggering tax bills hanging over their heads. I’m not surprised that so many small business owners are questioning HMRC’s efficiency and use of taxpayers’ money.
“True, from a customer experience standpoint, HMRC provides some useful information and support. But this merely papers over the cracks – around two million small business owners aren’t confident that HMRC is up to the job, which is a major issue.”
The FI asked Maley why it mattered what the self-employed thought of HMRC and if the results of the survey would have a negative sentiment impact on HMRC.
Maley responded, “Put simply, trust is built on confidence. These findings suggest that roughly half of small business owners don’t trust HMRC to do its job. In a field as complex as tax, collaboration are cooperation vital. And while I doubt HMRC will overthink this negative sentiment or look to change these perceptions, a lack of confidence doesn’t provide the right foundations for a successful relationship.”