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Jan 30, 2013

Taxing times for SMEs

Over one fifth of the UK's smallest businesses are anxious about having to complete their Self-Assessment tax return.

The research, carried out by YouGov on behalf of online accounting firm FreeAgent, found 21% of small businesses with five or fewer employees were anxious about Self-Assessment.

Of the 500 respondents some 5% said they were terrified of the prospect and only 35% said they were feeling confident.

The poll also found over half of the SMEs surveyed intend to seek professional help from a bookkeeper or accountant. Some 4% will look to friends and family.

Many SMEs wait until the last minute to submit their tax return: 46% say they will wait until a month before the deadline and 16% said they will rush to complete it in the week before it is due.

Ed Molyneux, CEO and founder of FreeAgent, said: “The whole point of Self-Assessment is that it should be as simple and stress-free as possible, and it clearly isn’t for many business owners.

“Self-Assessment is supposed to be an easy process that anyone can do, yet more than half say they’ll get an accountant or friend to help them – which suggests that the Government may need to consider making changes to ensure the process is easier. 

“With the growth of cloud accounting systems, however, I expect to see a sustained rise in confidence over Self-Assessment in the coming years.

“Small businesses are realising that an online accounting system not only offers an easy way to stay on top of your business accounts but also makes it easier to complete your tax return and ensure you submit it to HMRC in plenty of time. 

“As more small business owners turn to online accounting for managing their finances, I believe tax season will become a far less stressful and worrying time - which, in turn, will enable people to focus on running and growing their businesses.”

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