With the tax self-assessment deadline fast approaching on 31st January, many tax payers will be preparing to submit their return on time, or risk facing a penalty. Perhaps unsurprisingly, not everyone is a fan of this process. New research, carried out by YouGov for 1Tap Receipts, the expenses management app for the self-employed, finds that over half (55 per cent) of those who have to submit a tax return say they dislike doing so.
The research also identifies just how time-consuming the process can be – 45 per cent of respondents say they spend five hours or more completing their tax return, and 22 per cent spend ten hours or more on their annual submission.
Despite the fact that the majority of people filling out a tax return dislike the process, and many are spending the best part of a day doing so, the research highlights a startling lack of awareness about what is set to replace self-assessment by 2020; the Making Tax Digital initiative, 94 per cent say they hadn’t heard of it.
Under the new plans, sole traders and small businesses will have to keep track of their tax affairs digitally and report quarterly to HMRC. The data they submit will give them a clearer, up-to-date view of how much tax they owe and of their finances in general.
The government’s vision is that, by 2020, taxpayers will be able to see their complete financial picture in their digital account in the same way they would with their online banking. They will also be able to pay their tax bill in payments spread over the year – helping to ease cash-flow issues that many small businesses face
Michael Wood, co-founder of 1Tap Receipts says, ‘Make Tax Digital is a big, but overwhelmingly positive change as it will help self-employed people manage their finances in a much more streamlined and efficient way. In fact, many of them and their accountants are already automating various parts of the tax return process to give them a real-time view of their accounts, but without the headache of hours spent poring over a spreadsheet.’
The 1Tap Receipts app helps anyone who has to submit a tax return with managing their expenses. The user simply takes a photo of their receipt, the technology then does all the work for them including categorising the expense information.
This data will then automatically populate the HMRC self- assessment form for them. 1Tap Receipts has seen huge growth since launch this summer and is now the #1 Business App in the UK.
Further reading on tax returns
