Business owners stumped by expenses claims


What proportion of expenses do you claim back when you’re on the road visiting clients or entertaining a customer?

According to new research, only one in four small business owners claim back all of the expenses they incur personally for their business.

In a poll of 500+ owners of companies with five or fewer members of staff, just 26% of respondents said that they believed they claimed back every single business expense they incur, while 21% admitted that they claimed back half of their expenses or less.

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Not placing enough value on expenses is the most common reason for people not claiming them, with 41% admitting that they wouldn’t claim back an expense if they didn’t think it was worth claiming.

In addition, 35% of business owners admitted that lost or forgotten receipts were a major reason for them not claiming back all of their expenses, while 13% said they didn’t claim expenses because they are put off by the admin required to do so.

22% of respondents also said that they were worried they would claim back the wrong amount, while 19% admitted they didn’t claim all their expenses because they feared being challenged by HMRC.

The research, carried out by YouGov on behalf of online accounting provider FreeAgent, also revealed that only 32% of businesses felt fully confident that they weren’t paying too much tax as a result of not recording expenses properly.

Ed Molyneux, CEO and founder of FreeAgent, said: “It’s clear that expenses and tax are big issues for people who run small businesses. Nearly three quarters of small business owners admit to feeling anxious about the tax system and many of them are also failing to claim back all of their business expenses.”

Molyneux said this means that many small business owners are effectively subsidising their own work, potentially paying too much tax and could be losing thousands of pounds.

“What’s especially worrying is that small business owners aren’t just concerned about claiming back expenses because they think it’s too complicated or they’ll be challenged by HMR, but they also regularly lose receipts or even just feel that expenses aren’t worth claiming.”

Tags : businesscatering equipmentexpensesProducts
Andrew Seymour

The author Andrew Seymour

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