When you’re self-employed in the UK, it’s most likely that you do your taxes without any professional help. This is what we learned from a recent survey conducted by SJD Accountancy.
Doing taxes on your own can be stressful
SJD Accountancy sent out the survey to 359 self-employed contractors based in the UK. The questions included how they handled their accounts, what the main issues were, and how they affected personal life.
The study revealed that as much as 72% of self-employed contractors manage taxes on their own. Regarding the remaining 28% who do get professional help, 18% employ a general accountancy firm, 7% hire a specialist accountant, and 3% seek a non-professional help, such as family or friends.
Interestingly, raised stress levels related to doing taxes were an issue for 7 out of 10 people surveyed, with 25% of people flagging accounting errors as the main reason for stress. 15% complained about the time it takes to deal with taxes, 13% were worried about the complexity of the process, while only 5% feared possible penalties.
According to our research on cloud accounting trends, as much as 27.5% of small businesses blame manual data entry for accounting errors.
Losing receipts biggest issue
SJD’s survey also focused on what issues, in particular, these amateur accountants face on a daily basis. Here are the most common answers and the share of respondents who included them:
- Losing receipts – 17%
- Missing deadlines or incorrect payments made to the HMRC – 15%
- Paying too much tax – 11%
But it’s not just about making sure your tax records and HMRC payments are in order. Amateur accounting can cause a lot of personal issues too according to the study.
SJD revealed that as much as 14% of respondents either lost sleep or had health issues due to doing their accounts. 6% said that it led to arguments with friends and family, while 5% had to turn down work offers due to the lack of time spent on doing accounts.
There are millions of amateur accountants
We have recently listed some accountancy skills that can be honed by playing engaging video games. The fact that these games were mostly mainstream titles suggests that today we live in accounting-oriented societies. This is especially striking once you look at the number of self-employed people in selected countries.
- United Kingdom – 4.7 million (2016 – source)
- USA – 16.7 million (2017 – source)
- Canada – 2.7 million (2016 – source)
If the 72% figure were to be representative of the whole group of 4.7 million self-employed, it would mean there are 3.38 million amateur accountants in the UK alone!
Bookkeeping technologies can reduce the stress level
One of the many ways to reduce stress levels due to doing your accounts is to use bookkeeping technologies that streamline the process. They help you make sure you won’t lose your receipts, and that your taxes are paid correctly and on time.
Cloud accounting technologies, such as QuickBooks or FreeAgent, are good examples of self-employed-focused solutions to help you out. These systems offer a lot of third-party add-ons that make bookkeeping even faster and more efficient.
A good example is arbitrue, an AI-based bookkeeping assistant that helps with manual data entry which is particularly useful for businesses that deal with a lot of paperwork. arbitrue extracts data from expense documents, such as receipts and invoices, and sends them directly to your accounting records. Just sign up to see for yourself.