Only one in four small business owners claim back all of the expenses they incur personally while trading, indicating that subsidising their work has become ‘the norm’ for micro-enterprise.
In a poll of more than 500 companies - with five or fewer staff members, just 26% of the respondents said they believed that “every single” business expense they incurred was recouped.
About a fifth weren’t as diligent, saying that they claimed back half of their expenses or less, found the poll by YouGov, which was commissioned by FreeAgent, a provider of accounting software to freelancers.
Not placing enough stock in the sum of expenses was the most common reason the traders gave for not claiming, with 41% admitting that they wouldn’t claim back an expense if they didn’t think its value was worth it.
In addition, 35% of the business owners admitted that lost or forgotten receipts were a major reason for them not claiming back all of their expenses, while 13% said they failed to claim due to being put off by the paperwork and ‘admin’ required to do so.
Fear of the taxman compounds the issue: 22% of the traders worry they will claim back the wrong amount, and 19% admit to claiming nothing because they dread being challenged by HM Revenue & Customs.
Pointing to the many reasons why the business owners failed to reimburse themselves, FreeAgent said it was “worrying” that so many of the smallest enterprises disregarded what was rightfully theirs to claim.
Founder Ed Molyneux reflected: “This means they are effectively subsidising their own work, potentially paying too much tax and could be losing thousands of pounds.”
Mar 6, 2013
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