SMEs face anxiety over accounting

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Complexities in accounting are hurting SMEs, with a third of micro businesses overwhelmed by corporate accounts, according to research.

One in three small business owners that are responsible for completing business tax returns feel anxious about the paperwork, a study from cloud software provide FreeAgent found.

The research, conducted for FreeAgent by YouGov, also highlighted that a fifth of SMEs are still relying on pen-and-paper to keep on top of their accounts.

One in six admitted they did not have immediate access to all of their important financial information.

Businesses that miss deadlines for self-assessment, VAT and corporation tax returns may face fines from HMRC, which could put pressure on already-tight bottom lines.

The study found more than one in 10 (13 per cent) of micro-businesses - which is equal to around 650,000 firms across the UK - admit to missing deadlines. Nine per cent, or 450,000, received fines.

Ed Molyneux, chief executive of FreeAgent, said: “Anxiety about your accounts is a clear warning sign that you’re not on top of the numbers.

“To counter this, we recommend micro-business owners put robust systems and practices in place.

“When it comes to tax returns, it’s important not to panic if you miss a deadline. Filing your tax return late can be a scary prospect but as long as you do it as soon as possible - and settle your fine and actually pay the tax you owe - you should be able to avoid extra fines and scrutiny.”