LONDON: UK businesses are shouldering £10bn a year in extra tax costs, with the majority falling to the country’s SMEs, the AAT has found.
With the self-assessment deadline fast approaching, the accounting body canvassed the views of 500 businesses to discover the cost of compliance for UK business. It found that SMEs spend around £9.9bn each year on tax compliance compared to the £100m that larger firms pay.
On average, the UK’s SMEs incur £4,376 in tax compliance costs, just under half the £8,907 large businesses typically pay. While the average tax burden for SMEs is lower, the vast majority of these enterprises have no more than four employees compared to the 250 or more employees found in large businesses. As such, the impact on SMEs is proportionally much greater.
Compliance is also a time-consuming affair. The average SME spends up to two hours per week on tax issues, compared to the six hours of an average large business. While the SME total is a third of that undertaken by large business, the cost to the business itself is proportionately higher due to their lower head count.
