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UK’s small businesses ignoring minor expense claims
A new report has found that UK freelancers, sole traders and micro-businesses could potentially be failing to claim millions of pounds worth of tax relief from unclaimed expenses they deem too small or time-consuming.
Research conducted by FreeAgent, a cloud accounting software provider, has revealed that around a quarter of a billion pounds worth of expenses with individual values of £10 or less are being unclaimed by UK micro-business owners every year.
Using an aggregated sample of 2.5 million expenses worth a total of £168 million in 2015, the report was able to calculate that the average micro-business owner has around £216 worth of expenses with individual values of £10 or less every year.
A similar survey of 100 web professionals revealed that nearly a quarter (22 per cent) of respondents said they did not think it was worth claiming any expense that cost them £10 or less.
By combining the two pieces of research it has been estimated that across the UK’s 5 million micro-businesses, approximately £238 million of small expenses remain unclaimed each year.
In addition, just 39 per cent of those surveyed said that they claimed back all of the expenses they incurred for their business, while one in every 20 (five per cent) respondents admitted they didn’t claim any of their expenses whatsoever. This suggests that business could potentially be losing out on thousands of pounds each year in tax relief.