Over a Quarter of Firms Name Accounting and Tax Issues as Barrier to Success
One-in-10 self-employed people or small businesses still haven’t filed their 2014 tax return
More than a quarter of small businesses believe that accounting and tax problems are one of the biggest obstacles to success, costing their firms valuable time and money, according to a recent survey.
And small businesses are evidently struggling as one-in-10 companies have yet to file their tax return and are risking penalty fees as the deadline (Jan 31st) looms closer.
The research, by business software provider Xero, also revealed that bookkeeping and cashflow problems are costing over five million small and mid-sized businesses a total of £175bn in their first year of trading (approximately £35,000 each).
According to the report, 25% state that chasing payments is one of the most difficult parts of running a business and another 17% admit that they would put a better system in place if given a chance to start over.
In addition, the average small and medium enterprise has been set back by up to a year due to an inability to focus on other areas of the business because of accounting and tax inefficiencies.
Alex Bell, from accountancy software firm Kashflow, provided seven tips to help businesses prepare for the self-assessment tax deadline to Startups.co.uk and emphasised the importance of avoiding fines:
“One of the most challenging tasks start-ups and new business owners face in their first year of operating is the annual self-assessment tax return, and it’s a challenge that often results in a final week rush to meet the taxman’s end of January deadline.
“As daunting as the self-assessment process is, getting your return filed on time (and paying what you owe) is crucial for avoiding the late filing fees that are automatically incurred if you miss the January 31st deadline.”