For business owners in the UK, January is marked by the height of the tax return season, and the associated stress and confusion. As of November 2022, only one-third of SME owners had submitted their tax return, with a tenth (9%) saying they’ll struggle to pay their tax bill on time.
A survey of over 600 small business owners from small business insurance provider Simply Business found that 5 per cent of small business owners in the UK take a week or more to complete their tax return. One-tenth (11%) state that there is not enough support available for small business owners who are struggling to fill their tax return effectively, and well over half (58%) of small business owners have always forked out for accounting services to aid in the process.
Tax returns are just one of the many challenges facing SME owners in the New Year, with a quarter (26%) worried that, quite simply, they will not be able to pay their tax bills in 2023.
Concerns including a decline in sales in the new year (43%) and spiralling inflation and interest rates continue to mar the SME landscape, while a fifth (22%) of respondents stated their worries about the supply and material shortages caused by the ongoing geo-political unrest.
As a result, 15 per cent have no confidence in their business heading into the New Year with the reality of the cost-of-living crisis also affecting the way that SMEs can prepare for 2023. Three in ten (28%) say they’re unable to plan or budget due to uncertainty, a tenth (10%) have been unable to order stock and three in five (60%) say their profit margins are down.
Alan Thomas, UK CEO at Simply Business said, “the tax return season can be a stressful period for small businesses in the UK, specifically because they don’t feel they have the necessary support from HMRC. As a result, many are being forced to hire external support, adding to the list of outgoings.
“Of course, it is a vital part of being self-employed, but more time spent on complicated tax returns takes away from investing time and money in their businesses. More guidance is needed from HMRC to make sure that the process is straightforward and as painless as possible.”
Simply Business has launched its Self Assessment Tax Resource for SME owners, working with a range of experts to bring free, tailored resources and tax return tips for the self-employed.