The FSB surveyed over 2,000 of it's 200,000 members to see how small businesses cope with the increasing amount of paperwork related to their tax obligations.
.. tantamount to money down the drain ... could spend that time growing their business ...John Allan, FSB Chairman
Responses proved interesting and add more pressure to calls for a simpler taxation system for small firms - increasing simplification already introduced via the cash accounting system.
- 50 percent spend up to eight hours each month getting through tax paperwork.
- 11 percent spend up to six days sorting through paperwork to keep their tax admin up to date.
- 77 percent spend up to £5,000 on top of their actual tax to pay accountants, or purchase specialist software.
- One third could not pay taxes when due because of cash flow struggles.
- 20 percent paid late through errors when checking due dates.
Allocating the information from the survey to the UK as a whole, shows up to £500 million is spent on making sure taxes are paid each year.
The FSB proposes a new 'enterprise tax' system aimed at VAT registered incorporated businesses. Effectively extending the existing cash-based accounting system to businesses turning over up to £300,000 (matching the limit of small companies corporation tax).