Figures released by the Federation of Small Businesses show that half the owners of the smallest businesses spend between 2 and 8 hours per month understanding, calculating and completing tax forms and that for 11% tax administration takes an astonishing 6 days per month. This is a significant amount of time to lose from running a business and servicing customers, in what is often a very demanding and challenging environment, for business-owners that are already working long hours.
Furthermore, it was reported that businesses tend to spend up to £5,000 per year accessing help to deal with their tax obligations, with two thirds of owners estimating an average annual cost of £3,651. Despite this financial outlay, one in five businesses owners stated that a lack of understanding about what's required by the tax system has led to missed deadlines and late payments of taxes, with almost one in three saying that a lack of cashflow planning has resulted in them not paying taxes on time.
Reflecting on the importance of the army of small businesses in the UK to the economic recovery, the FSB Chairman used the figures as evidence for the need for further tax simplification for the smallest businesses.
The above is one of the reasons why we believe our service at Orange and Gold is so ideal for limited company freelance contractors, who effectively have the same tax and record-keeping obligations as any small business and often use a traditional accountancy support model. The sort of time commitment, cost, lack of planning and missed deadlines described by the report are just totally unnecessary, if the right support service is used.
Because we specialise in this area, all of our systems and processes are set up to ensure deadlines are never missed and clients always know what is required, for example using automated reminders. Our online portal dramatically reduces the admin burden, with a simple monthly process for our clients to simply raise invoices and expenses - that's it. This means as little as half an hour per month is required out of their busy schedule and we take care of everything in terms of tax compliance on their behalf. Plus they can see what their tax liabilities and obligations are, in real time, 24/7. And all of this is covered by a fee of only £95 per month (£1,140 per year). A significantly different picture to the one painted by the FSBs report."