The end of the tax year is in sight, a key time for you to make sure you’ve done everything you can to minimise your tax burden. The average UK small business spends £5,000 and three working weeks every year on tax compliance, according to the latest findings from the Federation of Small Businesses (FSB).
The FSB’s ‘Taxing Times’ report signposts the many hurdles small businesses face when meeting their obligations and paying their taxes. Almost half of participating businesses said determining the tax rates at which they’re required to pay is a challenge. Meanwhile, four in ten businesses said they find exemptions confusing.
Value Added Tax (VAT), Pay-As-You-Earn and Employer National Insurance Contributions (ENICs) were reported as the most time-consuming taxes to get to grips with. According to the FSB, the average small business spends 95 hours a year complying with these three alone. This is why more than three-quarters of small firms pay a specialist to ensure they meet their tax obligations correctly.
Almost half (47%) of small firms pointed out that business rates have made growing their firm more difficult, whilst a similar proportion claimed corporation tax has hampered their expansion. Just under half (44%) of businesses accused ENICs of stifling growth and one-in-seven respondents blamed VAT.
When asked about changes that would reduce the tax compliance burden, 53% of businesses suggested that making payments by instalment would improve the process and make it more straightforward.
A similar proportion (52%) also said they would prefer to receive an early estimate of their tax bill. Meanwhile, around 40% of respondents highlighted that automated tax calculations would be a useful option.
If you are looking for any assistance with tax compliance please do not hesitate to contact us either via our web enquiry form or call 0141 221 2984