UK Accountants Demand SME Tax Cuts and Multinational Crackdown Ahead of Budget

A new survey from FreeAgent reveals that 62% of UK accountancy professionals are calling for lower business taxes for SMEs and freelancers ahead of the upcoming Budget. With the profession also demanding IR35 reform and simplified VAT, these findings highlight a significant gap between current fiscal policy and the needs of the UK’s five million small businesses.

What was announced

The research conducted by the Scottish accountancy software provider highlights a widespread desire for legislative change to support the UK's small business sector. Beyond the 62% calling for lower taxes, nearly half of the respondents (49%) want the Government to implement a stricter crackdown on tax avoidance and evasion by multinational corporations. Financial incentives also remain a priority, with 37% of accountants advocating for more aid for new business starters.

The survey identifies significant concerns regarding the welfare of the self-employed. One-third of respondents (34%) are calling for enhanced statutory protections, including access to pensions, sick leave, and maternity pay. This sentiment extends to tax regulation, where 34% of accountants want the new Labour Government to reform or replace IR35 legislation, and 33% argue for its total abolition to better support the profession.

Regarding tax administration, 44% of those surveyed want a simplified VAT rating system, while 37% are seeking improvements to the existing Making Tax Digital (MTD) framework. Interestingly, 33% suggested the introduction of a tax rebate or credit scheme specifically for SMEs that submit their MTD for Income Tax updates on time. There is also a notable push for a slower pace of digitisation; 36% of respondents want a delay in the mandatory implementation of e-invoicing, which is currently scheduled for 2029, and 35% want the removal of national insurance anomalies.

"There are over five million registered small businesses in the UK, and they are the backbone of our economy. Despite this, SMEs face a lot of challenges, and are often left feeling left out in the cold when it comes to support."

Roan Lavery, CEO and co-founder of FreeAgent

The companies involved

FreeAgent is a prominent Scottish accountancy software provider that specialises in cloud-based tools for freelancers and small business owners. Based in Edinburgh, the firm has established a significant presence in the UK fintech market by focusing on the specific needs of micro-businesses, a segment often underserved by larger enterprise resource planning (ERP) platforms. The company’s software automates various aspects of financial management, including invoicing, expense tracking, and tax forecasting, and it maintains a direct integration with HMRC for tax filings.

The firm has become a key voice in the UK’s transition toward digital tax reporting, frequently providing data-driven insights into how regulatory shifts affect the accountancy profession and their clients. As a specialist in the SME sector, FreeAgent competes in a crowded market of cloud accounting providers but differentiates itself through its focus on the UK’s unique tax landscape and its advocacy for the self-employed and small business communities.

What FF News has reported before

FF News has extensively tracked the challenges surrounding the UK's tax digitisation journey. We previously reported that Over 400,000 Small Businesses Miss First Making Tax Digital for Income Tax Deadline, a trend that continued as FreeAgent Warns Small Businesses as 400,000 Miss MTD for Income Tax Deadline again in late 2026. Prior to these missed milestones, we covered how thousands of UK self-employed were at risk of non-compliance due to the complexity of the new requirements. We also detailed the transition as HMRC Launches Automatic MTD Sign-Ups for small businesses to force adoption.

What this means

The accounting profession is signaling that the current regulatory environment is creating excessive friction for the UK's smallest entities. The demand for an e-invoicing delay suggests that while digitisation is the long-term goal, the current pace of change is outstripping the capacity of small firms to adapt. If the government ignores the call for IR35 reform and VAT simplification, it risks stifling the very sector it relies on for economic growth. The fintech sector now faces a strategic tension: whether to continue pushing for rapid, mandatory digitisation or to pivot toward advocating for a more manageable regulatory timeline that accounts for the administrative burden on micro-businesses.