These figures have been calculated by the Federation of Small Businesses (FSB), which is calling for significant reforms to the tax system, including the further rollout of Making Tax Digital, to reduce compliance costs for small businesses.

The lobby group's latest report, A Duty to Reform: Making tax work for small businesses in a digital world, looks at ways the tax system could be made simpler and easier to navigate for small firms, as the Making Tax Digital project progresses.

The UK’s largest business group has set out measures to reverse those trends and ensure MTD delivers on its potential to improve productivity and profitability among small firms.  

According to the FSB small businesses are each spending an average of £4,100 and 52 hours a year on tax compliance.