February 2006 - Small Business News

Small Business Information - Are You Adequately Prepared for Tax Responsibilities?

Small businesses have been quick to embrace the internet for business banking, but new research shows that this organised approach is not matched in other areas such as preparing for tax and vat deadlines.

More than half of the micro businesses (less than five employees) surveyed by small business software company Two Oars admitted to being unprepared either financially or administratively for tax or vat bills. This is despite the fact that 63% of them control their bank accounts over the internet.

Although 72% of small firms asked considered their business’s finances to be better run than their personal ones, more than a quarter had transferred a debt to a credit card to fund their business. Worryingly, this number increased to 37% for micro-businesses, of which there are 3.7million in the UK alone.

With credit card debt recently exceeding £56billion in the UK, these findings suggest that, as with consumer debt, small businesses’ perception of financial control may not be matched by the reality.

91% of the businesses researched said that they check on their business’s finances on a monthly basis. This would suggest that a major part of the problem is poor business data, or insufficient tool and knowledge to analyze it.

With so many businesses struggling over tax and vat, you can help your business move forward by preparing effectively. Online filing at HM Customs and Excise is one of a number of things that can make the process easier and quicker.

If you are struggling to prepare for your tax and vat requirements then why not read our helpful articles on accounting and tax in our portal here.