A new report published by the Federation of Small Businesses (FSB) has found that the average UK small business spends £5,000 per year on tax compliance.
The FSB also revealed that small businesses spend three working weeks each year on complying with their tax obligations.
Pay as You Earn (PAYE), VAT and national insurance contributions (NICs) were highlighted in the report as being the most time-consuming taxes that firms have to deal with, with many spending an average of 95 hours per year complying with them.
An additional 46% of firms find calculating tax rates challenging, whilst a further 40% find exemptions confusing.
The FSB has urged the government to reform the UK tax system. It has proposed a series of changes intended to help simplify the tax collection process, including giving businesses an estimation of what their tax bills will look like before they are due and allowing firms to pay taxes in instalments.
Commenting on the issue, Mike Cherry, National Chairman of the FSB, said: ‘Time and money spent by small businesses on navigating the tax system is time and money not spent on innovating, expanding and creating jobs.
‘We hear a lot about the need to simplify the UK tax code. In fact, our priority should be simplification of the tax compliance process.’
As your accountants, we can help you to minimise the tax burden. Please contact us for assistance.