One in five sole traders, micro and small businesses in the UK say they ‘dread’ the prospect of doing their taxes, new research finds.
As entrepreneurs across the UK prepare for the new financial and tax year, a quarter also said they found the experience of doing their taxes stressful.
This is despite one in four entrepreneurs stating that a key motivation for starting their own business was to help them to lower their stress levels. Female, young and new business owners were also found to be disproportionately more likely to feel this way, with 28% of women said they feel stressed doing their taxes compared to 19% of men.
Nearly a fifth of entrepreneurs, who took part in the research for Mastercard, said that having access to digital tools and mentoring support would be beneficial to improving the process of completing their taxes, yet many cited significant barriers to accessing digital support, including the cost of technology and its implementation; a lack of time to properly explore options; poor digital literacy; and not knowing which technology was right for their needs.
The results support the Strive UK programme – designed to help the UK’s micro and small businesses access the support and tools they need to succeed in the digital economy. Small businesses can find out more about the right tools for them using Make a Plan, developed by Enterprise Nation as part of Strive UK.
Natasha Jamal, Vice President, Mastercard Center for Inclusive Growth at Mastercard, said: “We know that keeping on top of your taxes can be daunting, but for too many of Britain’s entrepreneurs it’s causing unnecessary stress and worry, while undermining the reasons why they chose to set up their own business in the first place.
“More needs to be done to help these entrepreneurs navigate these challenges. It’s why we created Strive UK, partnering with like-minded organisations to help businesses take full advantage of opportunities in the digital economy and reach their full potential.”
Emma Jones CBE, Founder of Enterprise Nation – a Strive UK grantee – said: “Doing complex and detailed tax returns is just another thing on a long to-do list for small business owners that takes them away from getting on with the day job.
“But learning basic digital skills like those offered by the Strive UK Programme can not only make this dreaded task quicker in the long run, it can also lead to better all-round digital skills which can help increase productivity more broadly in the business, increasing profitability.”
The Barometer also gives a snapshot of small businesses attitudes, including the impact of the pandemic and their confidence for the future. The findings showed the full impact of the pandemic on small businesses, with nearly half experiencing a decrease in their turnover due to the impact of COVID-19. However, despite the challenging last two years, the UK’s small businesses remain optimistic as they enter the new financial year. Over half of them said they feel positive about the future of their business and 39% plan to grow their turnover by up to 20% over the next five years.
In terms of digital technology, over half (53%) of businesses said that they now expect digital technology to only become more important to the success of their business over the next five years, with nearly a third (32%) saying new technologies will be crucial to future growth.
The findings build on Mastercard’s Striving to Thrive Report 2021, which revealed the significant benefits that technology brings to small businesses such as time saved, new customers acquired and increased revenues. Help accessing digital tools was cited by businesses as the biggest factor in helping them achieve their future revenue growth, collectively estimated at up to £827 billion over the next five years.