New research from FreeAgent, providers of cloud accounting software to small business owners, today reveals insights into Christmas business spending trends.
The research, which surveyed 2000 self-employed adults across the UK, finds office party booze is the biggest Christmas cost for UK SMEs, with over a quarter (26%) admitting this is their most commonly filed Christmas expense. 25 to 34-years olds are the booziest age group, with 30.7% of party animal millennials most commonly claiming back money for Christmas party alcohol, closely followed by 30.2% of 18 to 24-year olds.
The data also shows the most unusual Christmas expenses. Wanting to fit in is a priority as nearly one in five SMEs (19.7%) have expensed Christmas jumpers during the holiday period, the snuggle is certainly real this festive season! Perhaps even more surprising is that more people have expensed Santa Suits (15.1%) than office Christmas trees (13%). Staple Christmas snacks are also funded by the business, with 11.2% expensing mince pies. Finally, a jolly Christmas atmosphere seems to be an important investment, with 4.6% expensing festive music for the office.
However, Christmas isn’t all about fun and games for SMEs and freelancers. The research also revealed that nearly half (40.2%) of self-employed adults in the UK spend Christmas Eve filing expenses. Other holidays being used to complete financial admin include New Year’s Eve (26.2%), Boxing Day (23.5%), New Year’s Day (22.7%) and Christmas Day (14%).
Despite claiming some unusual Christmas expenses, 57.3% of respondents wouldn’t claim business expenses below £10, meaning a minimum of £24m is lost annually on unclaimed expenses. In fact, the research revealed that almost 80% of self-employed people leave business expenses unclaimed every year.
Looking in more detail, 44.2% of self-employed workers don’t regularly claim coffee during the year – at an average price of £2.44, this can quickly add up. Other expenses that go unclaimed are food when travelling for work (36.8%), fresh fruit (33.7%), office biscuits (32.4%) and travel (20.5%). When asked what they would spend the money on if they claimed all their expenses, 37.9% of SMEs said they would book a much-deserved holiday, while one in six men say they would go to the pub more often.
Ed Molyneux, CEO and co-founder of FreeAgent said, “The festive season comes with new, unusual expenses – things like Christmas jumpers and cards for clients are easy to overlook. That’s why we conducted research – to explore the expensing habits of self-employed people, not only over the festive season, but all year round.
Regardless of whether the Christmas lights are on and there’s tinsel on the windows, small things, like claiming your coffee or mileage, can add up fast. For example, one cup of coffee when you’re travelling to visit a new client costs you around £2.44; five coffees a week… that’s an unclaimed £49 a month and all of a sudden you have lost out on £585 in one year – on coffee alone.
My advice to self-employed people is to be vigilant of claiming back the expenses that rack up over the festive season, whether it is your mince pies for your staff or a card for a client. More importantly, small businesses need to keep this up all year round. If you are a small business owner, consider your diligence with expenses a gift to yourself”