Small businesses in the UK are getting a raw deal in their dealings with HM Revenue and Customs, an accounting industry body has argued.

In a survey conducted by the Institute of Chartered Accountants of Scotland (which has a 50% Scottish membership, with the other half of the 21,000 members coming from elsewhere in the UK and more than 100 countries around the world), it emerged that while large companies benefit from the existence of a designated large business department and the associated tax officer expertise, SMEs and other small businesses often have to fight to access expert opinion.

Revealing that 65% of those polled rated their dealings with local compliance offices, which handle the tax affairs of small businesses, as poor or very poor, Elspeth Orcharton, Assistant Director of Tax at ICAS, explained that:

“The UK’s largest businesses are given good service through customer relationship managers in HMRC’s large business services department, created in 2007. However, the demand this has placed on resources has resulted in poorer services for the majority of smaller businesses. HMRC’s operating and staffing systems are simply inadequate to support compliance with what has become one of the most complex self-assessed tax systems in the world. Unaddressed this will become a threat to public finances and closing the tax gap."

She continued: “Almost half the members who responded were happy with the technical skills of HMRC staff handling phone calls, once they had found someone with suitable knowledge, but getting to speak to such a person remains a problem. HMRC’s contact and management systems need to be fit for purpose so that people don’t feel they are being passed from pillar to post.”

An incoherent approach to the collection of tax was also cited as a factor in the dissatisfaction of the small businesses questioned, with ICAS finding that the debt management division of the UK tax authority was rated as poor or very poor by 60% of respondents.

“Data used to collect tax is too far removed from those HMRC offices which handle calculations of liability”, Orcharton argued, continuing: “Aggressive collection tactics are too often used to pursue tax not actually due, and communications between the different parts of HMRC need to be improved.”