ALMOST half of Britain’s entrepreneurs risk being “hung, drawn and quartered” by HM Revenue and Customs because of a lack of basic accountancy skills, new research suggests.
More than one-in-three keep “lousy” books and 29 per cent are “clueless” when it comes to tax, VAT and PAYE forms. Worryingly, 17 per cent even admit they have “winged it” and submitted wrong or partially-completed documents to the HMRC, according to a survey.
The statistics, published for the first time yesterday, were compiled by Crunch Accounting as part of a nationwide report into small business accountancy malpractice. A spokesman for the firm, which polled 500 business owners and senior directors across the UK, warned that those who fail to take their obligations seriously are “playing with fire” and could be closed down.
He said, “Britain’s entrepreneurs should be congratulated for taking such a bold step and starting out on their own. Yet, as these figures show, many are running a very serious risk of being hung, drawn and quartered by HMRC for failing to submit correct returns. It’s a problem we deal with day-in, day-out. Thankfully, it’s a problem that can be easily rectified with the right external support and software.”
The statistics were compiled over a four-week period and involved business owners, company directors and senior managers, all aged between 18 and 60.
Nearly half (49 per cent) admitted they were only “vaguely familiar” with the current tax, VAT and PAYE legislation, while a whopping 29 per cent were “unfamiliar or clueless”.
Only 22 per cent said they were up-to-speed and able to conduct their own accounts to the required standard.
Meanwhile, some 41 per cent admitted their books are need of an “overhaul” by a qualified accountant, and 37 per cent said described them as “lousy”.
Almost a quarter (23 per cent), however, believe their books to be “perfect”.
Shockingly, 17 per cent have submitted wrongly completed forms to the HMRC – and a further 23 per cent would consider doing so.
A spokesman for Crunch, which specialises in online accountancy for small businesses, said: “The remarkable thing is that a small business need only pay £600 or less each year for quality accounting, without the hassles of paperwork. Yet the fines for failing to do so could – and often do – put entrepreneurs out of business.”