Corporate report

Tell ABAB report 2022 to 2023

Published 19 September 2023

1. Executive summary

As Chair of the Administrative Burdens Advisory Board (ABAB), my passion and commitment is focused on making a noticeable difference for small business by supporting HMRC in:

• helping to reduce administrative burdens
• ensuring that the tax system is easier, quicker and simpler

ABAB represents the small business community. I and the 10 independent members, come from a diverse range of businesses and professions. Our focus is to make sure that HMRC understands the needs of small businesses.

Listening to and understanding the small business experience of engaging with the tax system is vital. We use the ABAB Annual Report and ABAB mailbox to engage with others. The amount of detail received from small business is critical to our effective engagement with HMRC.

One of the key ways we gain insight is through our annual Tell ABAB online survey, which has previously averaged around 3,000 responses. This year’s survey ran from 19 April 2023 to 2 May 2023, and I’m delighted to confirm a record number of responses – almost 7,500 - representing a 146% increase from last year.

Thank you to everyone who took part. At a time when various factors can contribute to dwindling response rates, it is good that so many people took the time to engage with our survey. We appreciate you taking the time to share your views and experiences. The record number of responses this year indicates a strength of feeling from small businesses to let us know about the critical issues as they see them.

The key findings from our survey reveal that burdens on business remain a significant concern and they continue to increase year on year. Off-payroll working rules, Making Tax Digital and changes in importing and exporting procedures have contributed to increasing burdens during the survey period. Additionally, businesses state that they have not witnessed benefits of digitalisation yet.

The shift to nomadic working poses challenges. According to this survey, 59.5% of those who worked from home or had employees working from home or as nomadic workers, were familiar with HMRC’s working from home guidance. Whilst this percentage might look relatively high, these workers now form a significant part of the workforce, with over 63% of respondents stating that they were working from home or as nomadic workers.

There is definite evidence from the survey that guidance to business is improving. Many respondents rated the ease of understanding written correspondence and the information on YouTube videos highly. Whilst there are still problematic HMRC forms, the numbers here are relatively low and although there are remaining frustrations with GOV.UK, these are also relatively low.

Another important message is that respondents continue to express a strong desire to speak to a human advisor. Satisfaction levels on response times for telephone calls remains low, with respondents being dissatisfied with this service for that reason.

Of the responses, 86.9% came from businesses and 12.7% from tax agents. This represents a significant shift from 2022 when 67.8% of responses were from businesses and 32.2% from agents.

Respondent	2022	As % of answered	2023	As % of answered
A business	1,358	67.9%	6,496	86.9%
An agent	642	32.1%	947	12.7 %
Not answered	1,041	-	35	-
Total	3,041	-	7,478	-

The age range of respondents was very similar to last year, with limited responses from under 24-year-olds, and the highest proportion of responses coming from ages 55 to 64.

Chart and accompanying table show the number of responses by age of respondent, the age band with the highest number of responses was 55 to 64.

Age band of respondent	2023 responses	2022 responses	% of total (2023 survey)	% of total (2022 survey)
up to 24	17	5	0.2%	0.2%
25 - 34	197	75	2.6%	2.5%
35 - 44	759	296	10.1%	9.7%
45 - 54	1,510	620	20.2%	20.4%
55 - 64	2,131	949	28.5%	31.2%
65 and over	1,186	516	15.9%	17.0%
Did not answer	1,678	580	22.4%	19.1%
Total answered	5,800	2,461	77.5%	81.0%
All respondents	7,478	3,041

Whilst we will always look for new ways to attract views from the widest range of small businesses, the volume of responses this year makes our survey more representative than ever before.

If you have any ideas on how to further improve our survey, please email your suggestions to the ABAB mailbox.

Thank you so much for sharing your valuable feedback through the Tell ABAB Survey.

Dame Teresa Graham DBE

2. Introduction

A selection of ABAB members work closely with HMRC officials in a working group approach to develop survey themes and questions – ensuring alignment with ABABs current priorities.

As in previous years, and demonstrating a sample of the broad range of themes ABAB support HMRC with, this year’s survey focused on multiple topics:

• Making Tax Digital
• importing and exporting ​
• Off-payroll working
• Basis Period Reform
• simplifying forms
• working from home/nomadic workers
• Time To Pay (TTP)

To help ABAB and HMRC understand trends and developments from the findings of previous Tell ABAB Surveys, the following enduring themes were also included in the survey:

• HMRC communications and engagement
• legislative burden and impact

The Making Tax Digital (MTD) section of this report looks at awareness of and preparedness for MTD. We have sought to understand the experiences of small businesses already signed up for MTD, the impact on cost and time and feelings about MTD software. We also wanted to understand the benefits brought to business by using MTD software. Understanding the benefits experienced and challenges faced when making and submitting returns to HMRC via MTD-compatible software will help inform future ways of working at HMRC.

We have once again captured the real-life experiences of working with new customs procedures when importing and exporting. Insight on the administrative burdens experienced through changes to customs processes, and how it feels for those using the Trader Support Service to help support trade with Northern Ireland, will all be shared with HMRC.

Coverage in our survey of off-payroll working(IR35) and Basis Period Reform proposed changes will improve understanding of the small business experiences and awareness of these programmes, alongside their actual and potential impact.

To further support progress in our work with HMRC to reduce costs and burden to businesses, it was important to include the theme of simplifying forms again. We want this work to be informed by customer experience, and the findings from the survey sections will help us to achieve that.

The awareness and impact of working from home rules, and of the support available through the TPP arrangement, was also explored in this survey.

With little sign of any let up from the current challenging economic climate, ABAB recognise the pressures facing small business at this time. We will continue to work together with HMRC to highlight the messages from this survey, so that collectively we can develop a tax system that is easier, quicker and simpler.

3. Responses received

The annual turnover of businesses responding to the survey is shown below.

The highest proportion of respondents declared a turnover of less than £85,000. This was also the case in the 2022 survey. Last year however, 24% of respondents reported turnover of over £2 million, a much higher proportion than the 7.4% seen in this survey.

Chart and accompanying table show the number of responses by annual turnover band with the highest number of responses 0 to £85,000.

Annual turnover (banded)	Count of responses	As % of total	As % of answered
0 - £85,000	2,836	37.9%	38.4%
£85,001 - £150,00	1,257	16.8%	17.0%
£150,001 - £250,000	872	11.7%	11.8%
£250,001 - £500,000	850	11.4%	11.5%
£500,001 - £999,999	544	7.3%	7.4%
£1 million - £2 million	462	6.2%	6.3%
£2 million and over	555	7.4%	7.5%
Did not answer	102	1.4%
Total answered	7,376	98.6%
Total respondents	7,478

Of the businesses responding, 66.6% of responses came from those with less than 5 employees. The next highest proportion was businesses with 6 to 10 employees, at 9%.

Of the agents responding, the highest proportion (20%) declared that they had between 201 and 500 clients.

Concerning the scope of business operations, 68.3% of businesses (96.3% of those which answered) operate solely within the UK, with only 1.4% operating in Europe and 1.2% in other countries.

4. Making Tax Digital

All VAT registered businesses need to keep VAT records digitally and file their VAT returns using MTD-compatible software.

Of the respondents who are businesses, 75% were VAT registered. Of these businesses, 55.8% said that they had been required to move to MTD software for record keeping and return submissions. When asked how these businesses found out about MTD, 41.5% had become aware through an HMRC letter with a further 12.2% finding out through GOV.UK. Outside of official government communications, 22.8% found out from their agent.

How did you find out about MTD?

	Count of responses	As % of total	As % of answered
HMRC letter	1,503	41.5%	42.1%
Agent	828	22.8%	23.2%
GOV.UK website	441	12.2%	12.4%
Other	434	12.0%	12.2%
Trade press or newspapers	201	5.5%	5.6%
Trade association	61	1.7%	1.7%
I didn’t know about it	56	1.5%	1.6%
Friends and family	43	1.2%	1.2%
Did not answer	59	1.6%
Total answered	3,567	98.4%
Total respondents	3,626

Those that were already keeping digital records were asked to rate their experience of MTD. On average, businesses indicated a broadly neutral response to their experience of MTD. 18.8% gave an answer of ‘very positive’ or ‘slightly positive’ When asked how businesses felt about MTD software, 23% of respondents gave an answer of ‘neither easy nor difficult’. Whilst 27.8% of respondents gave an answer of ‘easy to use’ or ‘very easy to use’, 9.9% gave an answer of ‘difficult’ or ‘very difficult’.

Overall, for businesses who are VAT registered, the great majority of respondents felt that they were ‘prepared’ for MTD, with only 16.1% saying they felt unprepared. 25.1% said that they were ‘very prepared’ and 62.8% said there were ‘prepared’ and ‘somewhat prepared’. 26.0% of respondents said there was ‘no significant effect’ on cost and 25.3% said there was ‘no significant effect’ on time. There were some differences between time spent and cost, of those that answered 34.5% said that there was some increase in cost compared to only 24.3% who answered that there was increase in time spent. Only 3.2% reported a reduction in cost whereas 12.9% reported a reduction in time.

See table below, including those who did not answer:

Impact	MTD effect on cost (%)	MTD effect on time (%)
Increased significantly	11.6%	9.5%
Increased slightly	22.9%	14.8%
No significant effects	26.0%	25.3%
Reduced slightly	2.5%	8.7%
Reduced significantly	0.7%	4.2%
Did not answer	36.4%	37.4%

When asked what changes businesses needed to make to comply with MTD requirements, 24.3% of businesses who responded said that they had ‘bought a new accounting package’, and 16.9% acquired ‘bridging software for spreadsheet’, whilst 21.6% said they had ‘upgraded their existing package’. 19.2% of businesses said that they had made ‘no change or already had outsourcing in place’.

The change made by your business for MTD compliance

	Count of responses	As % of total	As % of answered
Bought an accounting package	692	19.1%	24.3%
Upgrade existing package	614	16.9%	21.6%
No change/already outsourced	545	15.0%	19.2%
Acquired bridging software for spreadsheet	481	13.3%	16.9%
Employed an accountant/agent	333	9.2%	11.7%
Other	179	4.9%	6.3%
Did not answer	782	21.6%
Total answered	2,844	78.4%
Total respondents	3,626

VAT registered businesses were asked what the benefits of MTD brought to their businesses. 43.7% did not answer this question. Of those that did answer, 41,5% chose ‘other’ as the benefit. 37.3% of businesses said they had been able to submit ‘VAT returns more quickly’.

What benefits has moving to MTD brought to your business?

	Count of responses	As % of total	As % of answered
Other	848	23.4%	41.5%
VAT returns submitted more quickly	763	21.0%	37.3%
Up-to-date picture of the business finances	154	4.2%	7.5%
Digital confidence in record keeping	146	4.0%	7.1%
More accurate records	132	3.6%	6.5%
Did not answer	1,583	43.7%
Total answered	2,043	56.3%
Total respondents	3,626

5. Customs importing and exporting

Since the UK’s departure from the EU, businesses have been adapting to the new requirements around importing and exporting goods. For this survey, 83.5% of responses stated that they do not import and export, with only 16.5% of respondents stating that they do. Of those that do, 62.3% of importing and exporting businesses said that, in the last year since the UK left the EU, there has been a ‘considerable increase’ to the administration associated with importing and exporting, and it continues to be a burden on their businesses’. A further 20.9% report a ‘moderate increase, which is now part of business as usual’, whilst 13.3% report ‘no change’. Only 1.2% report a ‘reduction’ in administration in the last year.

The chart and accompanying table show how the administration associated with importing and exporting from the UK has changed. 62.3% said that this has ‘increased considerably and continues to be a burden on their business’.

In the last year since the UK left the EU, how has the administration associated with importing and exporting from the UK changed?

	Count of responses	As % of total	As % of answered
Increased considerably and continues to be a burden on your business	771	62.3%	63.8%
Increased moderately but is now considered as business as usual	258	20.9%	21.3%
Not changed and is about the same	165	13.3%	13.6%
Reduced and is not a burden on your business	15	1.2%	1.2%
Did not answer	28	2.3%
Total answered	1,209	97.7%
Total respondents	1,237

There have been a number of changes to customs processes: these are the Single Trade Window, the closure of CHIEF (Customs Handling of Import and Export Freight) and introduction of Customs Declaration Service, Safety and Security for Freight and Merchandise in Baggage Imports from EU. The survey aims to assess the impact of the changes on businesses, and 32.9% reported ‘no change’ to the ease of importing/exporting, with 23.9% reporting it has made it ‘less efficient’. Only 4.2% reported an ‘increase in efficiency’.

HMRC has changed custom processes by the introduction of: Single Trade Window, the closure of CHIEF/introduction of Customs Declaration Service, Safety and Security for Freight and Merchandise in Baggage Imports from EU.

If this affected your business, what affect has it had on importing and exporting?

	Count of responses	As % of total	As % of answered
No change	407	32.9%	35.7%
n/a	386	31.2%	33.8%
Less efficient	296	23.9%	25.9%
Efficient	35	2.8%	3.1%
More efficient	17	1.4%	1.5%
Did not answer	96	7.8%
Total answered	1,141	92.2%
Total respondents	1,237

When asked if businesses trade with Northern Ireland, 28.5% said they did and as a result use the Trader Support Scheme (TSS). 39.9% of businesses using TSS ‘rely upon a third party for their administration’, whereas 16.4% do all the ‘administration themselves’. 13.9% employ a ‘mixture of both’.

If ‘yes’ via TSS, what does your business do?

	Count of responses	As % of total	As % of answered
Rely upon a third party to complete all administration whereby you incur a charge for that service	141	39.9%	43.3%
n/a	78	22.1%	23.9%
Complete all the administration yourselves	58	16.4%	17.8%
Mixture of both	49	13.9%	15.0%
Did not answer	27	7.6%
Total answered	326	92.4%
Total respondents	353

27.2% of these businesses find TSS either ‘difficult’ or ‘very difficult’ to use, with only 3.4% finding it ‘easy’ or ‘very easy’.

The chart and accompanying table show how businesses have found TSS. 27.2% business find TSS either ‘difficult’ or ‘very difficult’ to use.

How do you find TSS?

	Count of responses	As % of total	As % of answered
Very easy to use	4	1.1%	1.3%
Easy to use	8	2.3%	2.5%
Neither easy nor difficult	70	19.8%	22.2%
Difficult to use	50	14.2%	15.8%
Very difficult to use	46	13.0%	14.6%
n/a	138	39.1%	43.7%
Did not answer	37	10.5%
Total answered	316	89.5%
Total respondents	353

6. Off-payroll working

10.4% of respondents to the Tell ABAB survey reported their business was affected by the off-payroll working (OPW) rules. Of these, 29% were ‘an employer’, 27.2% ‘a self-employed worker now treated as an employee’, and 17.8% ‘an agent/payroll company’.

How have you experienced OPW?

	Count of responses	As % of total	As % of answered
An employer	225	29.0%	29.3%
A previously self-employed worker now treated as an employee	211	27.2%	27.5%
None	193	24.9%	25.2%
An agent or payroll company dealing with off-payroll working	138	17.8%	18.0%
Did not answer	9	1.2%
Total answered	767	98.8%
Total respondents	776

The following proportions refer only to businesses who had experience of OPW as either an employer, a self-employed worker, or an agent or payroll company.

Businesses and agents were asked what effect the OPW rules had on both their admin burden and the fees that they charge. Of those who responded to the OPW questions, 90.1% experienced an increase in admin burden, compared to only 3.4% seeing a reduction in burden. Fees also went up, with 65.3% increasing their fees either ‘significantly’ or ‘slightly’. The question of any lost work due to OPW was asked specifically to both businesses and employees (previously self-employed workers). Of those that answered this question, 46.4% saw more reports of lost work as a result of OPW rules whilst 16.5% said no work was lost.

As a result of OPW have you lost work?

	Count of responses	As % of total	As % of answered
Yes	360	46.4%	73.6%
No	128	16.5%	26.2%
Did not answer	287	37.0%
Total answered	489	63.0%
Total respondents	776

30.8% of respondents with experience of OPW said that they needed to employ contractors onto their payroll as a condition of their work, compared to 26.3% who said that they did not have to employ a contractor.

As a result of OPW has your company or your employer, if you were previously self-employed, required contractors to come onto the payroll as a condition of their work?

	Count of responses	As % of total	As % of answered
Yes	239	30.8%	54.0%
No	204	26.3%	46.0%
Did not answer	333	42.9%
Total answered	443	57.1%
Total respondents	776

7. Basis Period Reform

The Basis Period Reform questions were only asked to the 13% of respondents who declared that they were agents. Of those that answered this question, 92.8% of agents said that they were ‘aware’ to some degree of the changes proposed, with 43.1% saying they were ‘very aware. Only 7.2% said that they were ‘not aware’.

The chart and accompanying table show awareness of the changes proposed for Basis Period reform. Of those that answered this question, 92.8% of agents said that they were aware to some degree of the changes proposed.

Are you aware of the changes proposed for Basis Period Reform?

	Count of responses (Agents Only)	As % of total	As % of answered
Very aware	276	29.1%	43.1%
Aware	205	21.6%	32.0%
Somewhat aware	113	11.9%	17.7%
Not aware	46	4.9%	7.2%
Did not answer	307	32.4%
Total answered	640	67.6%
Total respondents	947

44.9% of agents said they were prepared to advise clients on the impact of the Basis Period Reform. 19% answered that they were not and 36.1% of agents did not answer the question. When asked about their interactions with clients, 16.6% of agents said that they had helped clients change to the tax year basis. 9.7% answered that they were spreading client work on a basis period throughout the transition year, with a further 24.1% answering that they were ‘somewhat’ spreading work through the year.

When asked about the impacts of the Basis Period Reform, respondents answered that the changes would not result in an improvement to taxation and business compliance costs, with 32.3% voting ‘No’ and 11% voting ‘Yes’. Also, 33.3% of agents said they were identifying clients who had overlap relief to use, with a further 19.7% saying that they had not done this yet (but were potentially planning to).

The chart and accompanying table show the impacts of the changes to the Basis Period Reform. Respondents answered that the changes would not result in an improvement to taxation and business compliance costs, with 32.3% voting ‘No’ and 11% voting Yes.

Do you believe this change will result in an improvement in business taxation and reduce businesses compliance costs in the long term?

	Count of responses	As % of total	As % of answered
Yes	104	11.0%	18.4%
No	306	32.3%	54.1%
Not sure	156	16.5%	27.6%
Did not answer	381	40.2%
Total answered	566	59.8%
Total respondents	947

8. Simplifying forms

To help inform our work with HMRC on reducing costs and burdens to businesses, we asked for views on which HMRC forms were often problematic.

The 3 forms most commonly referred to in the survey are Corporation Tax, VAT Return and VAT Registration. Form 64-8, which authorises an agent to act on a business’s behalf when dealing with HMRC, is also mentioned over 40 times.

Responses	Count
Tax return	264
Corporation Tax	127
VAT return	98
VAT registration	69
Time consuming	53
Business forms	46
64-8	41
Online forms	41
Accountant deals	36
Tax digital	32

9. Working from home  and nomadic workers

With a growing number of people working from home since the pandemic, we were keen to understand awareness of the HMRC working from home guidance, and the impact it is having.

When asked whether they worked from home, or have employees working from home or nomadic workers, 63.2% of respondents answered ‘Yes’. 59.5% of those answering Yes were familiar with HMRC’s working from home guidance. Of those who were familiar, 54.6% found the guidance easy to follow.

When asked what effect the working from home rules had on their business, the largest proportion (55.4%) of working from home respondents said there had been ‘no effect’. 28.8% of working from home respondents remarked a greater admin burden, including 6% who said the ‘increase was significant’.

Only 1.5% remarked a smaller admin burden, including 0.5% who remarked a ‘significant reduction in administration burden’.

The chart and accompanying table show the impacts the working from home rules had on businesses administration burdens. With 55.4% saying that it had ‘no effect’.

What effect have the working from home rules had on your/your business’s administration burdens?

	Count of responses	As % of total	As % of answered
Added to these significantly	285	6.0%	7.0%
Added to these a little	1,075	22.8%	26.5%
No effect	2,618	55.4%	64.6%
Reduced these a little	49	1.0%	1.2%
Reduced these significantly	23	0.5%	0.6%
Did not answer	675	14.3%
Total answered	4,050	85.7%
Total respondents	4,725

10. Time To Pay

ABAB recognises the financial pressures faced by small business at this time. Our survey explored the help available through HMRC’s Time To Pay (TTP) arrangement, which can allow extra time to pay tax bills if the taxpayer is unable to make payment in full by the deadline date.

35.5% of respondents were aware of HMRC’s TTP arrangements, compared to 63.1% who were not. 12.1% of respondents had experience of using the TTP arrangements. Of this 12.1%, VAT was the most common tax amongst TTP users, with 35% of respondents. This was closely followed by Self-Assessment with 31.3%. Corporation Tax and PAYE were less common, with 14.3% and 11.4% of respondents respectively.

When asked about using TTP during the pandemic, 56.2% of those who had used it had done so during the COVID-19 pandemic. In comparison, 43% only have used TTP since the pandemic ended.

Whilst 21.9% of TTP users saw no impact on admin burden by using TTP during the pandemic, 37.5% remarked an increase. This included 12.3% who said that TTP use had ‘added significantly’ to their admin burden. However, 12.2% remarked ‘a reduction in admin burden’ through TTP, including 3.8% who noted ‘a significant reduction’.

Compared to the TTP users during the pandemic, a similar 20.1% of respondents who had used TTP since the pandemic ended remarked that they had seen ‘no effect’ on their administration burden. 31.4% of users saw an increase in their admin burden due to arranging TTP post-pandemic, and 7.7% saw a reduction.

The chart and accompanying table show the effect of arranging TTP after the pandemic on businesses administration burdens. With 31.4% of users saw an increase in their admin burden due to arranging TTP post-pandemic, and 7.7% saw a reduction.

Thinking about the administration burdens on you or your business, what has been the effect of arranging TTP after the pandemic?

	Count of responses	As % of total	As % of answered
Not applicable	200	22.1%	27.2%
No effect	182	20.1%	24.8%
Added to these a little	179	19.8%	24.4%
Added to these significantly	105	11.6%	14.3%
Reduced these a little	45	5.0%	6.1%
Reduced these significantly	24	2.7%	3.3%
Did not answer	169	18.7%
Total answered	735	81.3%
Total respondents	904

11. HMRC communications and engagement

Customer experience

Only 5.4% of respondents remarked that their customer experience when engaging with HMRC had improved in the last 12 months. This is compared to 61.0% of respondents who answered that it had ‘stayed the same’, with 33.5% who said it had ‘worsened’.

Has your customer experience of engaging with HMRC improved during the last 12 months?

	Count of responses	As % of total	As % of answered
Stayed the same	3378	45.2%	61.0%
Worse	1859	24.9%	33.5%
Improved	298	4.0%	5.4%
Did not answer	1936	25.9%
Total answered	5542	74.1%
Total respondents	7478

In 2022, 46.3% of respondents believed that the experience had become worse over that 12-month period with 46.6% stating their experience had stayed the same. Whilst therefore the decline in satisfaction is getting less, it still represents a year-on-year worsening of customer experience.

Has your customer experience of engaging with HMRC improved during the last 12 months?

	2023 - % of answered	2022 - % of answered
Stayed the same	61.0%	46.6%
Worse	33.5%	46.3%
Improved	5.4%	7.1%

Webchat and telephony

When asked about both the webchat and telephony helpline service, 25.3% of respondents that answered rated it as ‘good’, with a further 7.0% rating it as ‘excellent’. However, 39.8% of respondents said that it was ‘poor’, and 27.8% remarked that it was ‘average’.

If you have used HMRC’s webchat or telephony helpline services, please rate the service you have used in terms of usefulness

	Count of responses	As % of total	As % of answered
Excellent	347	4.6%	7.0%
Good	1,245	16.6%	25.3%
Average	1,371	18.3%	27.8%
Poor	1,961	26.2%	39.8%
Total answered	4,929	65.9%
Did not answer	2,549	34.1%
Total respondents	7,478

Satisfaction with webchat and telephony in 2023 is almost identical to satisfaction scores seen in 2022. The highest proportion of respondents continue to rate the services as poor, and this has not changed since 2022. This indicates that customers have seen no change in HMRC’s business customer contact services.

If you have used HMRC’s webchat or telephony helpline services, please rate the service you have used in terms of usefulness

	2023 - % of answered	2022 - % of answered
Excellent	7.3%	7.0%
Good	25.5%	25.3%
Average	27.1%	27.8%
Poor	40.1%	39.8%

Helpline response times

42.9% of respondents who answered this question said that response times on HMRC helplines were poor, and 20.5% answered that they were bad. Only 7.4% of respondents rated the response times as very good. A large proportion of respondents (55.4%) did not answer this question indicating that had not used the helplines during the year.

If you have telephoned an HMRC helpline in the last year what was your impression of the response times?

	Count of responses	As % of total	As % of answered
Poor	1,429	19.1%	42.9%
Neither good nor bad	962	12.9%	28.9%
Bad	684	9.1%	20.5%
Very good	248	3.3%	7.4%
Did not answer	4146	55.4%
Total answered	3332	44.6%
Total respondents	7478

YouTube

All respondents were asked whether they had watched any of HMRC’s YouTube videos. 33.5% of those who responded said they had.

Of the proportion that had seen the YouTube videos, 50.5% said they had found them through HMRC communications, with a further 30.6% from GOV.UK. 10.5% discovered them through google, with only 1.5% referred by a friend or associate.

How did you find out about them?

	Count of responses	As % of total	As % of answered
HMRC communication	1,176	50.5%	53.4%
GOV.UK	713	30.6%	32.4%
Google	244	10.5%	11.1%
A friend/associate	36	1.5%	1.6%
n/a	32	1.4%	1.5%
Did not answer	127	5.5%
Total answered	2,201	94.5%
Total respondents	2,328

On rating HMRC YouTube videos, 47.4% of respondents who had seen them rated them as ‘good’, with a further 5.6% rating them as ‘excellent’. Combined, this is almost exactly the same proportion as the 2022 survey; 53% in 2023 voted as ‘good’ or ‘excellent’, compared to 52.9% in 2022. Across both years, a greater proportion of respondents rated the videos as ‘good’ or ‘excellent’ as opposed to ‘average’ or ‘poor’.

How did you rate YouTube videos?

	2023 - % of answered	2022 - % of answered
Excellent	5.6%	8.5%
Good	47.4%	44.4%
Average	36.2%	37.3%
Poor	10.9%	9.8%

Obtaining guidance from HMRC

46.3% of respondents who answered this question obtained information to help with business tax affairs from GOV.UK. 40.0% answered that they obtain the information from their agents and accountants. There was a smaller proportion of respondents saying they obtained information from groups such as professional bodies, publications, and non-government contacts.

Note that there was only one option to choose for this question, so this most likely represents a respondent’s principal source of information, rather than the only one.

Where do you find information to help your business tax affairs?

	Count of Responses	As % of total	As % of answered
GOV.UK website	2,604	34.8%	46.3%
Agents/accountancy firm	2,250	30.1%	40.0%
My professional body	341	4.6%	6.1%
Publications	181	2.4%	3.2%
In-house accountant	94	1.3%	1.7%
Non-government contacts	86	1.2%	1.5%
Friends and family	68	0.9%	1.2%
Did not answer	1,849	24.7%
Total answered	5,629	75.3%
Total respondents	7,478

Suggested improvements to letters

Respondents were asked to suggest any specific improvements they would like HMRC to make to their letters.

The most common suggestion was for letters to be written in plain English, with additional customers making similar requests in different ways such as layman’s terms, simple terms.

‘Tax return’ appears in responses from customers frustrated to receive HMRC correspondence asking them to submit returns after they had already done so, or do not believe that they need to do so for that year.

‘Corporation Tax’ appears to refer to customers upset with the reform to Corporation Tax, receiving notices of unpaid Corporation Tax, or frustrated with out-of-date guidance on GOV.UK.

Other respondents requested that HMRC send fewer letters, and others referred to long response times to receive an expected letter.

Survey words	Count
Plain English	40
Tax return	31
Corporation Tax	23
Stop sending	21
HMRC letters	18
Tax code	18
Contact details	15
Email address	15
Contact HMRC	13
Response times	13

Written correspondence

Most respondents (39.6%) who answered ‘average’ when asked how easy it was to read HMRC written correspondence, with 36.1% answering that it was ‘easy’ and 14.9% that it was ‘very easy’ to read. This is in comparison to smaller proportions of 6.8% who found it ‘difficult’ and 2.7% who found correspondence ‘very difficult’ to read.

If you have received any written correspondence from HMRC during the year how easy was it to read?

	Count of responses	As % of total	As % of answered
Average	2,527	33.8%	39.6%
Easy to read	2,304	30.8%	36.1%
Very easy to read	950	12.7%	14.9%
Difficult to read	433	5.8%	6.8%
Very difficult to read	175	2.3%	2.7%
Did not answer	1,089	14.6%
Total answered	6,389	85.4%
Total respondents	7,478

In terms of understanding what they had to do next from written correspondence, 41.8% answered that it was ‘neither easy nor difficult’. 30.3% found it easy to understand what to do next, with a further 11.1% finding it ‘very easy’. 12.2% found it difficult and 4.6% found it ‘very difficult’. On the whole, more customers found it easy to read and understand HMRC’s written communication than those who found it difficult.

How easy was it to understand what you had to do next?

	Count of responses	As % of total	As % of answered
Neither easy nor difficult	2,385	31.9%	41.8%
Easy	1,731	23.1%	30.3%
Difficult	695	9.3%	12.2%
Very easy	632	8.5%	11.1%
Very difficult	265	3.5%	4.6%
Did not answer	1,769	23.7%
Total answered	5,709	76.3%
Total respondents	7,478

New methods of interaction with HMRC

When asked whether they would consider interacting with HMRC through alternative channels, such as YouTube, Skype, Webchat and Short Message Service, 26% said that they would ‘definitely not’ use these channels, with a further 11.4% answering ‘possibly not’. Only 3.3% said they would ‘definitely’ use these channels, and 8.7% said they ‘probably’ would.

Would you consider using YouTube/Skype/Webchat/SMS to interact with HMRC?

	Count of responses	As % of total	As % of answered
Definitely not	1,945	26.0%	42.6%
Might or might not	860	11.5%	18.9%
Possibly not	850	11.4%	18.6%
Probably	647	8.7%	14.2%
Definitely	246	3.3%	5.4%
Did not answer	2,916	39.0%
Total answered	4,562	61.0%
Total respondents	7,478

In 2022, respondents were able to give separate answers for each channel. The percentage proportions for 2022 have been calculated based on an average of responses across the 3 channels; Skype, Webchat and SMS

Despite the larger numbers responding there has been little change from 2022 in the views of respondents on whether they would use these services.

Would you consider using YouTube/Skype/Webchat/SMS to interact with HMRC?

	2023 - % of answered	2022 - % of answered*
Definitely not	42.6%	37.0%
Might or might not	18.9%	23.2%
Possibly not	18.6%	19.0%
Probably	14.2%	14.0%
Definitely	5.4%	6.9%

Other areas you would like guidance/pointers

When asked about other areas that they needed better guidance, or pointers towards if they were unable to find what they needed, 31 respondents made reference to the ‘HMRC website,’ with a further 13 referring to the ‘GOV.UK website’. Most of these refer to difficulty navigating the website, with one customer saying it “goes around in circles”.

There were 13 references to difficulties contacting HMRC. Some respondents were either irritated at not being able to speak to a live agent due to long queue times, or they felt that HMRC needed specially trained agents to answer queries on Corporation Tax. Overall, respondents have a strong desire to speak to a human adviser.

Legislative burden and impact

When asked whether the legislative burden of tax compliance had changed during the last 12 months, of those that answered the question (75.3%) only 2.1% of respondents remarked that it had improved. A more substantial 46.5% said it had got worse. 51.2% of respondents remarked that it had stayed the same.

Do you feel the legislative burden in regard to tax compliance has changed during the last 12 months?

	Count of responses	As % of total	As % of answered
Stayed the same	2881	38.5%	51.2%
Worse	2619	35.0%	46.5%
Improved	119	1.6%	2.1%
Did not answer	1848	24.7%
Total answered	5630	75.3%
Total respondents	7478

Do you feel the legislative burden in regard to tax compliance has changed during the last 12 months?

	2023 - % of answered	2022 - % of answered
Stayed the same	51.2%	38.7%
Worse	46.5%	59.0%
Improved	2.1%	2.3%

There was a more even picture when respondents were asked if they had felt impacted by legislative changes, particularly regarding tax compliance, within the last 12 months. Whilst 51.1% of those who responded remarked that they hadn’t, a similar proportion of 48.9% remarked that they had.

In 2022, 59% of respondents believed the position has worsened over 2021 with 39% stating it had not changed and only 3% saying the burden had reduced.

The effects of burdens on business are cumulative and therefore whilst there are fewer people who believe the situation became worse from 2021 to 2022 than from 2020 to 2021, year on year, with only 2%-3% believing the position has improved, the overall impact of legislative burden continues to increase.

12. Conclusions

Once again, thank you to everyone who took part in the 2023 Tell ABAB Survey. We appreciate you taking the time to share your views and experiences. The record number of responses this year indicates a strength of feeling from small businesses to let us know about the critical issues as they see them.

ABAB’s engagement relationship with HMRC provides us with regular opportunities to deliver insights to their senior leaders, and to constructively challenge them to use the evidence you have provided. We will use the findings from this survey to try to influence the direction of HMRC’s work (where needed) and inform our priorities for the coming year.

In December, we will submit our ABAB Annual Report for 2023 to the Financial Secretary to the Treasury. In that report, we will review HMRC’s progress and performance against the priorities we set in 2022.