A taxing day for the small business owner
“The cheque is in the post.” It’s a familiar phrase, and one the average small business owner or self-employed person hears with annoying regularity. But is it a line you’ve had to use on the taxman today?
January 31: deadline not only for getting your completed tax returns in, but also for paying the balance you owe to Her Majesty’s Revenue & Customs. Now I know Alistair Darling is not in many entrepreneurs’ good books at the moment – the regular Startups readers among you will be familiar with our own views on the abolition of taper relief – but unfortunately you still have to pay him today.
The alternatives? Fines, interest, a court appearance? Not much fun. And yet, a staggering 20% of small business owners said they didn’t expect to get their returns in on time, according to a poll by accountancy firm Kashflow. That’s a 14% rise on last year. The company is predicting fines by HMRC could top £200m this year as a result.
Want to hear some of the excuses? Nearly 10% of respondents said they had forgotten all about their returns. Now call me naive but I have my doubts about the competence of any entrepreneur that can’t remember that annoying law about paying tax – proverbially one of only two certainties in life.
However, nearly a third said they found the forms too confusing. Now that’s an excuse I can get on board with. The forms ARE confusing, and not every entrepreneur has a head for numbers. There is a solution though. I’ve spoken to many a business owner who described their accountant as worth more than their weight in gold.
Something to bear in mind when January 2009 approaches.