Small businesses encouraged to get ahead on self-assessments as new tax year begins
6 April 2020
As the new tax year gets underway, Informi, the website offering free practical advice and support for small businesses, is calling on those who can to consider submitting their 2019/20 tax returns at the earliest opportunity – and get a head start for the new decade.
Figures obtained exclusively by Informi from HMRC show that almost five million people completed their 2018/19 tax returns online in January 2020 – 45.6% of the overall total – with a further 177,745 submitting theirs in February after the deadline, triggering an automatic fine. In contrast, just 4.6% of tax returns were submitted online in April 2019, despite this being the period when people are more likely to have all the necessary paperwork together to submit their details for the previous tax year.Aside from January, the next most popular months to complete tax returns were December, November and July.
| Month | Number of tax returns submitted (2018-19 tax year) | Percentage of annual total |
|---|---|---|
| Apr-19 (from 6 April 2019) | 489,920 | 4.6% |
| May-19 | 556,192 | 5.3% |
| Jun-19 | 548,528 | 5.2% |
| Jul-19 | 648,600 | 6.1% |
| Aug-19 | 486,750 | 4.6% |
| Sep-19 | 512,362 | 4.9% |
| Oct-19 | 633,197 | 6.0% |
| Nov-19 | 748,218 | 7.1% |
| Dec-19 | 1,006,729 | 9.6% |
| Jan-20 | 4,820,046 | 45.6% |
| Feb-20 | 117,745 | 1.1% |
Steven Drew, spokesperson for Informi, said, “We know that many people required to submit their tax returns will be battling to keep financially afloat during the ongoing coronavirus (Covid-19) pandemic. Obviously, the priority should be for them to ensure they manage their finances as well as possible at this time.
“However, as we have seen with the use of the past three years’ tax returns to help determine the size of support grants for those who are self-employed during the crisis, returns are of critical importance to the Treasury. Therefore, we would encourage those who can do so to submit their 2019/20 tax return as early as possible. As well as having the advantage of doing so during a typically quieter period at HMRC, potentially speeding up the process, they’re also more likely to have all the necessary information on hand and will allow themselves more time to deal with any problems – and avoiding potentially crippling fines.”
Tax returns for SME owners
Many small business owners will naturally feel ill-equipped at this time to submit their tax returns. Lack of financial expertise and qualified finance staff costs UK SMEs the equivalent of £2.9 billion due to issues such as tax miscalculations and unpaid invoices, whilst the Federation of Small Businesses estimates 37% of small businesses have run into cash flow difficulties caused by late payments. Meanwhile, according to feedback from business owners, businesses may also struggle due to issues with budgeting.
To help small business owners address these concerns and enable them to submit their 2019/20 tax returns as early as possible, Informi is encouraging them to take one of the new AAT Essentials online courses, which have been developed with the Skills Network, one of the UK's biggest online learning providers. The suite of bite-size courses aims to help students improve their understanding of key financial processes, and cover topics including cash flow management, budgeting, and finance for non-finance managers.
Steven Drew added, “Even for those who are prepared well in advance, submitting your tax return can often seem like a difficult and daunting process, however long you’ve been running a small business. The new online courses will help small businesses owners to tackle their tax return with confidence and develop the financial skills they need to enable their business to not only survive, but thrive, and all small business owners should strongly consider taking them.”
For more information please visit the Informi website.
