Sole traders spend 10 hours or more on annual tax return, study reveals
4 January, 2017
Sole traders are spending a staggering 9.5 million hours a year completing tax returns, with some spending more than 10 hours on their annual statement, a study has revealed.
The research, conducted by YouGov and Receipt Bank, found that some 45 per cent of the 1.89 million sole traders in the UK spend five hours or more completing tax returns, while more than a fifth (22 per cent) spend 10 hours or more.
It found that a large majority of sole traders in the UK are attempting to take on the most important document of the year alone, with 63 per cent claiming they do so without the help of an accountant.
Meanwhile, around 78 per cent of sole traders are tackling the tax return without the use of specialist software to compile their costs and expenses.
Contrastingly, just five per cent of traders said they enjoyed the process, compared to the 55 per cent who dislike it a lot.
And most sole traders surveyed had no idea that Making Tax Digital is to replace the paper tax return by 2020. The Government’s tax system overhaul will force nearly all businesses online to keep on top of their tax affairs and report quarterly to HMRC.
Michael Wood, Founder of Receipt Bank, says that 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,” he said.