New research from Intuit QuickBooks, the global technology platform, reports on the stress of your VAT return and it having a negative impact on small business owners, which is affecting their success and mental health. This could be leading to some businesses putting off setting themselves up for online digital tax returns.
The majority of VAT-registered businesses must file a tax return quarterly, but the worry and anxiety about completing these returns is taking up, on average, a full day per month for most businesses.
Small business owners are worried that they may face a hefty fine for filing their tax returns late or incorrectly, which could be preventing these companies from reaching their potential. Two in five small business owners say they could run their businesses far more effectively if they weren’t worrying about their VAT returns, while more say they could be focusing on growing their businesses.
According to the research, 33% have lost sleep and 29% have experienced exhaustion due to VAT returns, which in turn is affecting mental and physical health and the ability to do business effectively.
The research also suggests that small business owners have been delaying their VAT returns until as late as they can, with 45% only just making the deadline and 16% either submitting late or at the very limit of their time.
These trends are also bleeding into small businesses’ attitude to Making Tax Digital (MTD) legislation. From April 2022, VAT-registered businesses with a taxable turnover of less than £85,000 will be required to keep digital records and use software to submit their VAT returns. And 41% have still not registered to do this.
Digital is easier
Going digital could actually help curb future tax stress. 58% of small business owners agree that using digital software reduces, or could reduce stress when filing returns.
QuickBooks researched that the pros of using software to complete VAT returns are that it’s quicker, more accurate and more efficient than using traditional methods like spreadsheets, and makes it easier to keep up with system developments and changes.
Verplanken says, “Successful habits form when you frequently and regularly conduct a task and protect against forgetfulness, procrastination, and even fear by making your tasks part of your daily or weekly routines.”
“Building and adhering to these habits can minimise small businesses’ worries about their VAT returns and put them in full control of their business. Taking these steps will not only help them to adhere to the law, but also make them happier as a business owner.”
We have our own guide to filing Tax Returns here.
Glad I don’t have to to this.