How many business owners fail to do their tax returns? » SMEInsider

How many business owners fail to do their tax returns?

Over 600,000 microbusiness owners fail to complete their tax returns, with anxiety problems and overwhelming stress making it impossible for business owners to do their own accounting.

Research conducted by YouGov and accountancy firm FreeAgent suggests that adapting to the digital world is a large concern for microbusiness owners who do their own accounting.

One in five business owners complete their taxes with a pen and paper, even though an increasing amount of SMEs are using cloud-based technology to crunch their numbers.

The survey also reveals that 650,000 firms across the UK have not completed their tax returns, with 450,000 of those receiving fines from HMRC. The majority of these businesses employ between 1-10 people.

The stress of dealing with financial matters is what stops micro-business owners from completing their taxes. Nearly 10 per cent of participants feel “very anxious” when having to complete crucial tax documents, including their self-assessment, VAT and corporation tax papers.

Accountancy firms that specialise in dealing with microbusinesses are beginning to recognising that a proportion of business owners are unable to deal with their finances correctly.

‘‘Anxiety about your accounts is a clear warning sign that you’re not on top of the numbers. To counter this, we recommend micro-business owners put robust systems and practices in place,’’ commented Ed Molyneux, CEO of FreeAgent.

‘‘The more organised you are, and the easier you make it to manage your basic accounting, the less likely you’ll be to feel overwhelmed or anxious about your finances,’’ suggests continued Molyneux.