The Administrative Burdens Advisory Board (ABAB) carries out an annual survey as part of its role to ensure that HMRC understands the needs of small businesses. The key findings from the 2025 survey, published in ABAB’s report for 2024 to 2025, are summarised below.  

MTD income tax 

Awareness of MTD for income tax has increased between 2024 and 2025. In 2025, 46.4% of respondents said they were aware or very aware of MTD income tax compared to 33.3% in 2024. Although this is encouraging, it does suggest that a significant number of taxpayers who will need to comply with MTD income tax from April 2026 may still not be aware of this. HMRC has begun to send out mandation and reminder letters to taxpayers, as explained in a recent article.  

There has been an increase in the percentage of respondents who think that MTD for income tax will mean that cost and time pressures will increase significantly, perhaps reflecting increased awareness of what is required under MTD income tax and the available software options. This is particularly disappointing as 65.2% of respondents did not expect MTD income tax to have any benefits for their business or for their clients. 

Percentage expecting a significant increase in cost and time pressures 

Although ICAEW supports digitalisation of the tax system, it has called on the government to reconsider mandatory quarterly reporting. There is support for this in the survey. When asked if they support the increased emphasis on the use of software to engage with HMRC, the most popular answer (40%) was “yes, but not if mandatory”.  

Other areas 

The survey covers a wide range of areas, including the following: 

• HMRC service performance. Although HMRC’s telephone, webchat and app services show some signs of improvement, they continue to disappoint, with the most common response for a particular channel being that it is “poor”. Agents appear to be particularly dissatisfied as 66% of agents, compared to 28.1% of businesses, said that their experience of engaging with HMRC had worsened during the year. 
• Legislative burden. 57.4% of respondents said that the legislative burden associated with tax compliance had worsened in the past 12 months, up from 49.6% for 2024. ABAB says that “this burden directly impacts on small business productivity and wider economic growth, a situation which must change”. 
• Use of AI. The survey suggests that the use of AI is increasing and that users are more likely to be satisfied with the result. 21.5% of respondents said they had used AI to answer a tax query in 2025 (up from 11.8% in 2024) of which 55.1% (up from 22.2%) received an answer that they felt resolved their query. 

About the survey 

There were 3,146 responses to the 2025 survey, down significantly on the 10,052 responses received to 2024’s survey. No reason is given in the report for this although the timing of the survey for 2025 – during the summer holiday season – may have had some impact on the number of responses. Of the responses received, 77% came from businesses and 23% from agents.