Now that we are into the New Year, the attentions of many small business owners will now likely turn to the fast approaching January tax deadline. Whilst for a large number, this will already be in-hand, for many others it can present a fresh set of challenges to start the year.
According to research conducted by established insurers, RSA, almost half of UK small business owners admit to having struggled to pay tax bills ‘at some point’, with another 44% citing the fulfilment of tax obligations as a real barrier to business success.
Andy Davies, LDF Sales Director comments:
“One of the common tax issues faced by businesses is the timing of January tax as for most, December is a month where billings are at their lowest due to the Christmas shutdown.
"At the start of January, businesses are already suffering to some extent because they’ve had less revenue coming in, and then in a few short weeks they need to pay their tax bill. For many, it can be an extra struggle to find the cash flow to meet it.”
It’s little wonder therefore that one in four UK small business owners will submit their online tax returns late this January, with one in fourteen admitting that they’ve failed to meet the January 31st deadline on more than one occasion in the past. (Source: Informi)
While more than a third of businesses surveyed blamed this on accounting delays, 31% said that a lack of awareness on how to submit their return was the issue, and a further 27% confessing that they were simply unaware that they needed to submit a tax return at all.
Missing the deadline isn’t the end of the world, but it will trigger an automatic £100 fine, which can rise by £10 per day after three months up to a maximum of £900. Whilst these aren’t huge sums when in many cases, it does represent an additional and avoidable strain on cash flow. On average, small businesses missing the tax deadline will pay around £284.56, but for one in seven (13%), this penalty exceeded £500 with a further 2% having to pay more than £800 in late payment levies. (Source: Informi)
There IS a way of ensuring that you can satisfy this essential payment on time and avoid fees.
Increasing numbers of businesses now look to spread the cost of their annual tax liabilities, helping to reduce the impact this large outlay can have on cash flow. One such solution is via an LDF short-term tax loan facility.
In 2017, we provided over £25million to UK SME’s in the form of tax loans, helping a growing number of businesses to better manage this essential bill. Costs can be spread over a maximum 12-month term, making sure that bills can be paid on time and penalty fees avoided.
Contact us to discuss your requirements in detail, or to arrange your tax loan today simply click to apply.