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Businesses ‘lose 12 days a year on tax admin’

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According to figures from the Federation of Small Businesses (FSB), business owners ‘are losing around 12 working days a year keeping on top of their tax administration’, which ‘is costing them half a billion pounds a year’.

Half of the companies surveyed ‘spent between two and eight hours each month understanding, calculating and completing tax forms’. While about 30% of respondents told the FSB that cash flow problems caused them to miss their tax payment deadline, 19% of respondents admitted to paying late because of confusion over tax payment dates or difficulty in understanding what was required. Three-quarters of businesses told the FSB they had ‘spent up to £5,000 for software to keep up-to-date with their latest tax obligations’, despite also forking out for accountants and bookkeepers to deal with their tax affairs, and two-thirds of respondents estimated they spent an annual amount of £3,651 on their tax obligations – and the FSB calculated that ‘accumulatively [i.e. across all UK businesses] this means a minimum of £490m per year is spent in additional [tax-related] costs.’

FSB national chairman John Allan said in a statement: ‘There have been long-running issues with complex tax statuses if you’re a sole trader or running an incorporated business. Creating one new tax system and removing choice will make it simpler. It will free up time for businesses; it will give them the time to grow and contribute further to the prosperity of UK PLC.’