HMRC has just published details of its annual survey, covering some 1,800 interviews conducted in 2016, found that 55% rated their overall experience of dealing with HMRC over the past 12 months positively, an improvement from 51% in the previous survey in 2015.

Although their experience with HMRC remained less positive than average for mid-size businesses overall, some sub-groups showed strong improvement. They included businesses with more than 250 employees, where 45% gave a positive rating of HMRC, compared to 34% previously; businesses using a mix of digital and non-digital channels (51% compared with 46%); and businesses that reported experiencing a growth event (53% vs 46%).

Companies that reported only using digital channels to contact HMRC, 68% rated their customer experience positively, higher than those that used a mix.

As before, analysis showed that ‘HMRC getting tax transactions right’ was the most important factor in determining  overall customer experience, with 57% giving this a positive rating.

‘Acceptability of time taken to reach the end result’ was the next most important driver in influencing overall customer experience, and here positive ratings increased, from 42% to 46%. 

When businesses were asked whether HMRC minimised the cost, time and effort it took to deal with their tax affairs, 40% agreed, 32% were neutral and 24% disagreed. There were no clear trends by size of business, although the largest, with more than 250 employees, were most likely to feel neutral (42%) and least likely to agree (30%).

However, three-quarters (74%) of businesses with negative overall satisfaction disagreed with this statement. Of respondents who disagreed that HMRC ensured they paid or received the correct taxes, 73% also disagreed that HMRC minimised the cost, time or effort to deal with their tax affairs. There was no change in businesses’ views of how easy or difficult they found it to deal with their business’s tax issues over the last 12 months, with 57% responding that they found it easy (56% previously, 30% neutral (compared with 27%) and 12% difficult (15% previously). The smallest businesses were most likely to say they found it very easy, with 61% of those with fewer than 20 employees rating it as such, compared with 48% of those with more than 20.

Asked what aspect of the tax system they would change, the most common choice was anything to do with VAT (26%), previously cited by 20%.  Whereas previously National Insurance rate and threshold was the most mentioned (27%), there was a decrease with 22% citing it as an aspect they would most like to change. For the largest businesses with more than 250 employees, this was still the area they most wanted to change (36%) compared to 14% of businesses with fewer than 20 employees.

The third most frequently mentioned change was anything to do with corporation tax rate (13% now, 15% previously). The R&D tax credits rate was cited less frequently overall (8% / 7%), but was mentioned more often among businesses that planned to start trading internationally (18%), or who had started operations outside the UK (16%).

The proportion of businesses confident in the way HMRC are doing their job was consistent with the 2015 findings, with 47% saying they were confident and 37% neutral.

The specialist mid-size business unit became operational in April 2014, and covers approximately 170,000 active businesses. HMRC currently defines mid-size businesses as those with corporation tax or income tax self-assessment turnover of £10m or more and/or more than 20 employees. There are additional assessment criteria that can also qualify a business as mid-size, for example, if it has more than 10 partners.

Mid-size business survey 2016 is here.

Report by Pat Sweet