One in five entrepreneurs ‘dread’ doing taxes

April 6, 2022 | London, UK
  • Ahead of the new tax year, one in five sole traders, micro and small businesses tell Mastercard they ‘dread’ doing their taxes
  • Research shows female, young and new businesses owners more likely to find the experience stressful, despite many having set up a business to lower their stress levels
  • Nearly a fifth of respondents said better access to digital tools or mentoring would help alleviate this, yet raised costs, poor digital literacy and lack of time as barriers
  • Findings support Mastercard’s Strive UK programme, connecting small businesses with digital technology, skills and training opportunities tailored to their needs

One in five (22%) sole traders, micro and small businesses in the UK say they ‘dread’ the prospect of doing their taxes, new research from the Mastercard Strive Business Barometer finds.

As entrepreneurs across the UK prepare for the new financial and tax year, a quarter (24%) also said they found the experience of doing their taxes stressful. This is despite one in four entrepreneurs (26%) 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:

  • 28% of women said they feel stressed doing their taxes compared to 19% of men
  • 39% of 18-34 year olds found their tax return to be stressful compared to 27% of 35-54 year olds
  • 36% of those running a 1-2 year old business felt stressed by their taxes compared to 24% of those who had run their business for 11-15 years

Nearly a fifth (18%) of entrepreneurs 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 (60%); a lack of time to properly explore options (22%); poor digital literacy (17%); and not knowing which technology was right for their needs (15%).

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, 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 (44%) 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 (54%) 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.

- Ends - 

Methodology:

Opinium, on behalf of Mastercard, surveyed 1,000 small business owners (1-49 employees, including sole traders) in the UK between 15th and 25th of February 2022.

Media Contacts

Suman Hughes, Mastercard

About Strive UK

Strive UK is an initiative of the Mastercard Center for Inclusive Growth that aims to that aims to empower 650,000 micro and small businesses in the UK to succeed in the digital economy over the next three years through free guidance, helpful tools, and personalised, one-to-one mentoring. The programme is run in partnership with Enterprise Nation, Digital Boost and Be the Business, and has been designed to complement Government initiatives such as Help to Grow. Strive UK builds on Mastercard’s $250 million commitment to support small businesses’ financial security and extends the company’s commitment to financial inclusion, with efforts underway to bring a total of one billion people and 50 million micro and small businesses into the digital economy by 2025. 

  • Enterprise Nation will build a data driven “One Stop Shop” for micro and small businesses to help them understand and find the resources, programmes and tools available to them. The company will also manage a Strive Learning Network, bringing together large corporates and not for profits involved in delivering support to small firms for the purpose of sharing views and insight on what's working when it comes to building the conditions for enterprise to thrive. Visit enterprisenation.com/strive. 
  • Be the Business will deliver bespoke digital adoption and leadership development programmes for minority ethnic owned/led micro and small business, with a special focus on female owners from minority ethnic backgrounds. 
  • Digital Boost will provide mentorship, advice and coaching to help micro and small business owners to develop critical business skills. 

About Mastercard (UK)

Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. Our decency quotient, or DQ, drives our culture and everything we do inside and outside of our company. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all. 

www.mastercard.com