A new study suggests that 31 per cent of small business owners do not know how to correctly submit their tax return, while 27 per cent did not think that they were required to submit one at all.
The survey, which quizzed small and medium-sized enterprises (SMEs) about their tax return habits, also found that one in four business owners had, in previous years, failed to submit at least one return on time – and had been fined by HM Revenue & Customs (HMRC) as a result.
A further one in 14 small business owners said that they had previously missed their tax return deadline on several occasions.
Last year, HMRC’s own data revealed that the UK Government had dished out approximately £87million in fines on account of late tax returns.
Any late tax returns incur an immediate fixed penalty of £100, followed by fines of £10 per day up to a maximum of £900, after three months. If a return is late by six months or more, a penalty of either £300 or 5 per cent of the tax due – whichever is higher – will then apply. Additional penalties then follow.
The tax return deadline for the 2015/16 financial year falls on 31 January 2017 at midnight.
Last year, the Revenue claims that as many as 870,000 self-assessment taxpayers missed the deadline and incurred fines as a result.