£238m in expenses go unclaimed by micro-businesses and freelancers
22% of small businesses do not think expenses worth £10 or less are worth claiming, causing them to lose money
As much as £238m worth of expenses worth less than £10 remain unclaimed by freelancers and micro-businesses every year, according to FreeAgent.
Analysing 2.5 million expenses logged by customers on its cloud accounting software, FreeAgnet found that the average freelancer or micro-business owner has an estimated £216 worth of expenses with individual values of £10 or less every year.
Yet the survey found that 22% of small business owners didn’t think it was worth claiming expenses that cost them £10 or less – equating to around £238m across the UK’s five million micro-businesses.
Another 14% said they would not bother claiming expenses under £5, suggesting this overall figure could be higher.
The survey also found that only 39% of respondents claimed back all of the expenses incurred by their business, while a further 5% didn’t claim any expenses whatsoever.
Ed Molyneux, CEO and co-founder of FreeAgent, said: “In order to avoid overpaying tax, all small business owners should be scrupulous about reclaiming their expenses.
“But it’s surprising how few web designers and developers in the UK actually do claim everything back, and how many ignore or dismiss certain expenses for being so small.”