Wednesday, March 04, 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.”