Research and analysis

Understanding the impact of reporting cycles

A qualitative investigation into the effect of payment and reporting taxation cycles on the business experience of small and medium sized enterprises.


Understanding the impact of taxation cycles: Business experience and compliance behaviour of small and medium sized enterprises

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Currently, customers make tax payments, and report tax liabilities to HM Revenue & Customs (HMRC) at a variety of time intervals, from once a year to every month. Previous research has shown that voluntary tax compliance can be increased if reporting and payment cycles fit more naturally into existing business operations.

This research project sought to understand how the frequency of taxation cycles impacts the experience of payment and reporting to HMRC for small and medium sized enterprises (SMEs). It also aimed to explore how this influences compliance behaviours. The main research areas explored were:

  • how current taxation cycles fit in with business operations, and whether customers are satisfied with the current situation
  • how customers would respond to changes in the frequency of reporting or payment cycles
  • how changes to current taxation cycles could be successfully implemented

TNS-BMRB conducted qualitative depth interviews with 40 SMEs from across the UK between January and March 2015. Of the businesses interviewed, 16 were invited to participate in a second phase of research which took the form of an online discussion forum exploring in more detail the results of the depth interviews. The findings of the research will help HMRC develop its long term strategy for the SME sector.

Published 8 September 2015