Accounting software company FreeAgent has enabled a UK small business to make history by filing the world’s first tax submission from space - as part of a pilot scheme testing the next phase of the government’s Making Tax Digital (MTD) legislation.
FreeAgent - the first online accounting software to let small businesses file Self Assessment returns directly to HMRC - facilitated the groundbreaking submission for Tunbridge Wells-based singer, violinist and music teacher Jennifer Maslin, which involved a digital tax update being made from her FreeAgent account more than 26km above the Earth’s surface.
The project was coordinated by FreeAgent alongside the musician, who uses FreeAgent to manage her business finances, and her accountants Maslins Accountancy in order to demonstrate that with the right technology, taxes can be managed anytime, anywhere — even beyond Earth’s atmosphere.
From a launch site in Sheffield, FreeAgent worked hand in hand with experts from aeronautics firm Sent into Space to send a high altitude balloon and tablet computer to a height of more than 26,000m, before accessing the business’s live accounting data in FreeAgent’s software and submitting the tax update to HMRC via a secure satellite connection.
The watershed filing marks the highest altitude that a tax submission has ever been filed, and was made under the UK government’s new Making Tax Digital for Income Tax framework, which will be mandated from next April. The legislation will require all self-employed individuals and landlords earning more than £50,000 per year to keep digital financial records and make quarterly updates to HMRC to report their tax affairs.
By filing the first tax submission in space, FreeAgent is demonstrating how digital technology is breaking down barriers, making tax filing simpler and more accessible than ever before. This is particularly important, as it also comes after new research was revealed that suggests many UK small businesses are struggling to understand and adapt to the new MTD rules.
A new survey among senior decision makers at UK SMEs revealed that, as the countdown to MTD for Income Tax begins, there is still a large amount of uncertainty about the impact that these new legislative changes will have on small businesses. When asked about the short term impact, more than a third of respondents (37%) said they were positive about them, while a quarter (25%) said they were not convinced about the benefits.
In addition, only half (53%) of respondents agreed that MTD in general would be beneficial to small businesses in the long term, while 52% said the government had not provided sufficient information on what the legislation will mean for them - underscoring the continued need for clearer guidance, information and proactive support for businesses transitioning to digital tax filing solutions.
Separate research conducted by FreeAgent among small business owners has also revealed significant gaps in understanding and readiness for digital tax, with a fifth (21%) of small businesses surveyed admitting they don’t fully understand the next stage of Making Tax Digital, and 1 in 10 saying that they had never even heard of it.
Additionally, around a third (31%) of business owners polled said they feared Making Tax Digital could create additional pressure for them when it comes to managing their tax affairs. With 31% of survey respondents also saying they already felt stressed when filing their tax returns, the findings highlight the need for a system that simplifies the process—whether on Earth or even, as this latest space launch proves, beyond it.
Roan Lavery, CEO, FreeAgent, said, “Making Tax Digital is the biggest change for UK tax in more than a generation, but we know that many small businesses are still apprehensive about the legislation and how it will impact them. That’s why we wanted to show how straight-forward and manageable it is for small businesses and accountants to work together to submit tax updates to HMRC through FreeAgent - even in space!
“Hopefully the next 12 months will see business owners given the clarity and information they need to feel confident about the changes that Making Tax Digital will bring to them, and ready to comply with the latest rules when they come into effect next April.”
Commenting on achieving the first tax submission in space, Jennifer Maslin said: ““It’s still a bit surreal to think that my taxes have been submitted to HMRC from the edge of space. Seeing the footage from that high up and watching the tech all coming together to make it happen was amazing!
“It’s great to know that I’ll be ready and well-supported when Making Tax Digital for Income Tax properly comes into effect next year. If I can make a tax update from space, it should be a breeze to do it from my laptop on the ground!”
Julie Falchevska, director at Maslins Accountants, added: “We were thrilled to help Jennifer make the world’s first tax submission from space. By collaborating with her through FreeAgent, we not only ensured that she manages her finances and tax affairs as effectively as possible, but that we could also give her the support and reassurance needed to navigate new tax rules.
“We look forward to showing our clients how technology like FreeAgent can empower them and seamlessly manage the transition to the new Making Tax Digital rules over the coming year and beyond.”
Craig Ogilvie, HMRC’s Making Tax Digital Director, said: “Making Tax Digital for Income Tax is a transformative change that will improve tax collection and support small business productivity.
“One of the best ways self-employed or those with property income can prepare is by joining the testing phase now. Signing up early means they can get familiar with the new system, with exclusive access to our dedicated Customer Support Team, ensuring a smooth transition when they are mandated. We are committed to supporting businesses every step of the way with detailed guidance available on GOV.UK."