The FSB has published a report that highlights the many hurdles faced by small businesses when trying to pay their taxes. ‘Taxing Times’ has found that the average small business spends £5,000 and three working weeks every year on tax compliance.
Other statistics included in the report are equally concerning, particularly given the looming introduction of Making Tax Digital:
- 46% of small businesses find determining the tax rates applicable to them challenging.
- 40% find exemptions confusing.
- VAT, PAYE and National Insurance contributions were deemed to be the most time-consuming taxes to handle, with the average business spending a HUGE 95 hours every year complying with the three collectively.
- 77% find the tax compliance process so complicated that they employ specialists to ensure they are following the rules.
The complexity of regulation and the rates of tax have reportedly hampered growth within the UK:
- 47% say Business Rates have made growing their business more difficult.
- 44% have said that Corporation Tax has hampered expansion.
- 14% felt that VAT had prevented expansion completely.
So how could things be improved?
- 53% would like to be able to pay their tax in instalments.
- 52% would like to see an early estimation of their tax bill.
- 40% felt that automating the calculation of liabilities would be helpful.
Mike Cherry, FSB National Chairman, echoed our own views on the report, saying ‘Time and money spent by small businesses on navigating the tax system is time and money NOT spent on innovating, expanding and creating jobs.’
Very few business owners are fully aware of the Reliefs and allowances they could be eligible for.
- 55% are unaware of the tax reliefs available.
- Business Rates Relief for businesses based in Enterprise Zones have seen a very low take-up. 73% of these eligible businesses have not made use of it.
- The figures are better for small business rates relief, with 78% being aware of it or have claimed it. The dividend allowance is also popular at 51% awareness.
What we think…
Small business owners need to be relieved of the burden of a complicated tax system. Whilst we would wholeheartedly prefer less legislation overall, we believe it’s essential for a successful business owner to have tangible support and proactive advice to ensure that they’re able to focus on running and developing the business.
Until the FSB’s call for a real push from local and central government to raise awareness is forthcoming, it is down to accountants and advisors to do the job. It is paramount to the success of the UK economy that small businesses are given the support and knowledge to thrive.
That’s where we come in!
- We can help business owners by preparing their returns in good time, allowing them to plan for their liabilities in plenty of time.
- We can help business owners by identifying which reliefs and allowances are relevant to them, ensuring their claims are made in a timely fashion, and with full justification. Providing a full back ground for the claims can prevent any query or dispute from HMRC, which is just another distraction!
- Should HMRC decide to ask questions, our fully inclusive Fee Protection Scheme ensures that our clients don’t receive any unexpected fees for us to defend their position.
For more advice and a no-obligation discussion around minimising your tax liability and streamlining your reporting burden, do get in touch. We have a wide range of options that can release you from ‘Taxing Times’ and the burden of compliance, giving you back the freedom to concentrate on achieving your goals.