Compliance costs SMEs

Wednesday, March 4, 2015

SMEs pay almost £10 billion in tax compliance costs each year, according to research by the Association of Accounting Technicians (AAT).

The survey of 500 businesses reveals that the average SME spends £4,376 complying with business taxes each year. Collectively, the SME sector spends £9.9 billion annually on tax compliance.

Important findings:
  • SMEs spend up to 2 hours each week on tax issues
  • 70% of SMEs say they spend too much time focusing on tax.
  • Small business owners say they would rather invest the money
  • spent on tax compliance back into their businesses:
  • 1 in 3 would spend more on sales and marketing
  • 10% would use it to recruit more staff
  • 10% would increase their R&D budget.
 Mark Farrar, chief executive of the AAT, said:

“SMEs are the backbone of British businesses but some are being weakened by a hidden £10bn tax burden.

It is a strong indicator of just how hard dealing with tax can be when 80% of our members, experts at navigating through the intricacies of tax compliance, state that the UK tax system
is too complicated.”