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Companies saving, but a third of UK businesses missing out on £78m of tax benefits

Newcastle, 16 May 2007: Over half of UK small businesses (55 percent) estimate they are saving at least £100 each by submitting their payroll year end tax returns online. The survey of 1,368 businesses, conducted by YouGov on behalf of Sage (UK) Limited, suggests over 900,000 of the 1.64m VAT-registered businesses in the UK are making a combined minimum saving of at least £90million* ahead of the May 19th deadline.

Overall, 68 percent of respondents had submitted their business’ payroll year end tax returns online before, or plan to do so this year as opposed to manual submission. Of those who have, their main reasons were that they saved time (and therefore money), and that the system was very easy to use. Most companies submit online in a timely manner, with 40 percent doing so as soon as the HMRC gateway submission opens, and 48 percent completing with a few weeks to spare.

Despite the positive results, there still remains a huge opportunity for the 32 percent of businesses who have yet to submit online. Under current guidelines, businesses that have between 1 and 49 employees have until 2010 before online payroll year end submissions become mandatory. However, if they do choose to submit online this year, they will receive a tax rebate of £150 and there is a remaining £175 available for online filers over the next two years. The survey shows that the current 520,000 businesses who do not currently submit their payroll year end tax returns online are missing out on a total combined tax benefit of around £78million** this year.

Jo Ray, Managing Director, Sage (UK) Limited Small Business Division comments, “Clearly from the results of the survey, there are great savings to be had by any business, but more needs to be done to make businesses aware of the benefits they are entitled to. Sage is committed to helping reduce the administrative burden placed on small businesses, and we work closely with HMRC on behalf of our customers to constantly review and improve the service they receive from HMRC via our solutions. As a result we have seen a growth, year-on-year in the numbers of companies that have been submitting online, and reaping the benefits. We pro-actively communicate with our payroll customers to make sure they are aware of when the deadlines are, and provide award winning support in the form of dedicated UK call centres and information via RSS feeds and e-mails as well as our website.”

More support required
A call for support was also voiced by UK small businesses in the survey. Fifty-seven percent of respondents said that whilst they generally manage, they sometimes need help when submitting their payroll year end tax return online. But perhaps more worrying was that almost a third (28 percent) said that they were not aware of when the deadline was.

Additionally, a third (30 percent) said that the tax breaks for submitting payroll year end returns online were not sufficient enough, with a fifth of businesses saying that they felt the Government doesn’t provide enough information or support. Companies stated that they would like the Government to offer the following:

• 27 percent wanted more customer-focused support
• 24 percent wanted a dedicated support helpline
• 24 percent said more information ahead of the deadline would be helpful

When asked for their top three sources of advice when submitting their business’ payroll year end returns online, 48 percent of respondents would turn to a payroll software supplier. Thirty-three percent would go to an accountant and 29 percent would look online.

Zoe Walsh, associate at TPH accountants and a Sage accountant in practice adds, “Whilst the momentum for submitting payroll year end tax returns online gathers, there are still some areas to address in terms of providing the support that businesses require. 2010 is the deadline for all businesses in the UK to submit online, and whilst we can be encouraged by the savings that companies are currently gaining, we still need to provide assistance to those companies who need it.”

For those seeking advice about online payroll year end submissions, visit:


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