Happy New Year: We’re about to spend 9.5m hours filling in self-assessment tax returns
Mark your calendars: it's just over one month until the deadline to submit your self-assessment tax return on the 31 January, and new research suggests nearly 2m taxpayers will spend the better part of a working day completing their annual submission.
It took 45 per cent of sole traders five hours or more to file their tax return, and 22 per cent said they have spent 10 hours or more on self-assessment, the research said.
Most of the UK's 4.2m non-employing businesses go it alone when it comes to their taxes. The survey found 63 per cent of sole traders manage their returns without help from an accountant or friends and family.
Just five per cent of those surveyed by YouGov said they were fans of the current self-assessment process, whereas 55 per cent said they actively dislike it. No kidding.
HM Revenue & Customs (HMRC) might be adding to those stress levels, too. HMRC came under fire recently for its poor track record of dealing with customer phone calls.
Earlier this year, a parliamentary report revealed that the average call waiting time in October, when paper submissions of self-assessment forms are due, was close to 35 minutes.
YouGov compiled the research for 1 Tap Receipts, an expense management app, to test awareness of Making Tax Digital, an initiative set to replace the HMRC's self-assessment process by 2020.
The new plans mean sole traders and small businesses will keep on top of their tax affairs digitally, giving them a clearer view of their finances in a similar way to online banking.
“Although it’s a big change, many firms of accountants, and lots of sole traders are already embracing and preparing for it by automating parts of their tax return process to give them a real-time view of their accounts, without the headache of hours spent poring over a spreadsheet," said Michael Wood, Founder of Receipt Bank, the parent company for 1 Tap Receipts.
New systems to digitise the tax system include online Personal Tax Accounts to give taxpayers a real-time picture of their tax situation and the requirement of most businesses, self-employed people and landlords to keep track of their tax affairs digitally and update HMRC on their position at least quarterly.
However, small businesses with turnover of less than £10,000 will be allowed to use the digital services without having to either keep their records digitally or check in with the taxman once every three months.