Sole traders spending 9.5 hours on tax returns
With the self assessment online deadline closing at the end of the month the UK’s sole traders are set to spend 9.5 hours doing their tax returns, according to research by expenses management app provider 1Tap Receipts which also identified very low levels of understanding about HMRC’s making tax digital (MTD) plans
YouGov survey commissioned by the technology supplier found that 45% of sole traders spend five hours or more completing their tax return, and 22% say they spend ten hours or more on their annual submission. This equates to a total of 1.89m sole traders in the UK who are spending the best part of a non-charged working day on their self-assessment each year, it calculates.
The research identified that most sole traders are taking an independent approach when it comes to managing their submission, with 63% saying they manage it all by themselves (without the help of an accountant or friends and family). Three quarters (78%) are also opting not to use any software to compile their costs and expenses, while 87% are not using it to compile their revenues and 91% are not using it to identify their tax liability.
Sole traders also expressed their thoughts on the current process for self-assessment via the research, with just 5% saying they liked it a lot, and 55% saying they dislike it. However, the majority also said they were unaware of future MTD requirements to keep track of their tax affairs digitally and report quarterly to HMRC.
Michael Wood, founder of Receipt Bank, the parent company for 1 Tap Receipts, said: ‘It’s no surprise that most sole traders find annual self-assessment a chore. The process of gathering up carrier bags full of receipts and spending hours manually inputting data into a spreadsheet is time consuming and takes them away from what they want to be doing: running their business.’
The survey indicated that a more regular, and so less burdensome, exercise would be welcomed by most sole traders. Over three quarters (76%) already report that they take time out at least once a month for financial management, and 17% of these are doing so on a daily basis.