Small businesses are reporting growing difficulty with tax administration despite improvements in some HMRC services, according to the largest survey yet conducted by the Administrative Burdens Advisory Board.
The 2026 Tell ABAB survey received 10,195 responses between 15 and 29 April, surpassing the previous record of 10,052 set in 2024.
Businesses accounted for 87.9% of respondents, with agents representing the remaining 12.1%. Three-quarters of responses came from organisations with five employees or fewer.
The findings provide a detailed picture of how smaller businesses experience tax compliance, digital services, guidance, legislative change, and contact with HM Revenue & Customs.
More than 96% of respondents said they operated solely within the UK, making the results particularly relevant to the administrative pressures facing domestic small enterprises.
Among those answering questions about legislative burden, 61.6% said the position had worsened over the previous 12 months, while only 2.4% said it had improved.
Dame Teresa Graham, chair of the Administrative Burdens Advisory Board, said the survey allows businesses and agents to share their experience directly with the board and government. ABAB said the findings would inform its work with HMRC on services, guidance, and processes.
The results present a mixed picture of HMRC’s customer-service channels. Telephone support remained poorly rated by a substantial group, although results showed some improvement compared with the previous survey.
Digital services performed better in some areas. Ratings for the HMRC app improved, while respondents continued to request more end-to-end online functionality for processes including payments, refunds, balances, correspondence, appeals, and forms.
Businesses’ overall experience of dealing with HMRC was relatively stable. Among respondents to the relevant question, 62.6% said their experience had stayed the same over the previous 12 months, 31.4% said it had worsened, and 6% said it had improved.
Guidance remains a persistent problem. Respondents highlighted clarity, navigation, and the ability to locate relevant information, while access to direct human support also emerged as a significant theme.
The survey also records rapidly growing use of artificial intelligence for tax information. Of those answering the question, 32.4% said they had used AI tools, up from 21.5% in the previous survey.
Among AI users, 61.1% said the answer they received had resolved their query. Another 30.4% were uncertain and sought an answer elsewhere.
The figures demonstrate both the opportunity and limitation of AI in tax administration. Businesses are using general-purpose tools when they need help interpreting information, but tax treatment can depend on precise circumstances and current legislation.
An answer that appears convincing is not necessarily sufficient where mistakes can create financial liabilities or compliance problems, leaving users to decide when independent verification is required.
For smaller companies, administrative burden extends beyond the direct cost of tax. Owners and managers may have no dedicated finance or tax department, so time spent interpreting requirements, correcting records, contacting HMRC, or configuring software is time unavailable for sales, customers, recruitment, and operations.
The effect becomes more pronounced when businesses encounter several changes together. Making Tax Digital, payroll obligations, VAT, reporting deadlines, and other requirements can each be manageable individually while producing a much larger cumulative workload.
Digitisation can reduce that burden when systems work together and guidance is clear. It can also shift additional work onto businesses where online processes are fragmented, difficult to navigate, or require repeated entry of information already held elsewhere in government.
The survey therefore provides a broader measure of administrative quality than simply counting how many services have moved online. The user experience depends on whether the underlying rule is understandable, whether information can be submitted efficiently, and whether problems can be resolved when an automated process fails.
ABAB has an advisory role and the report does not itself alter HMRC policy. Its significance lies in the scale of the response and the evidence it provides as tax administration becomes increasingly digital.
The board will now use the findings in its work with HMRC. The challenge is to convert improvements in individual channels into a broader reduction in the time, cost, and uncertainty small businesses associate with meeting their tax obligations.
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