Written by: Keith Tully
Reviewed: Tuesday 3rd May, 2016
Small and medium-sized enterprises (SMEs) throughout the UK are collectively missing out on millions of pounds in savings because they are not aware of tax reliefs and government allowances that could be available to them.
That’s according to a newly published study carried out by the insurance provider Direct Line for Businesses, which suggests that some 46 per cent of the UK’s SMEs have a “very poor” appreciation of the government tax regulations that relate to their operations.
Based on its own calculations, Direct Line has said that this lack of awareness on business tax reliefs and allowances means that close to 3.5 million companies could be missing out on some notable savings on an annual basis.
“Small enterprises account for over 99 per cent of the UK’s businesses so they are truly the backbone of our economy,” said Nick Breton, head of Direct Line for Business.
“However, this research highlights that there is a lack of awareness of the benefits available to small business owners which can ultimately impact the development and growth of their business.”
In addition to the 46 per cent of SME bosses who admit they have a poor understanding of tax reliefs and allowances, a further 18 per cent of those polled recently conceded that they probably have a “below average” understanding of these issues.
All of which means that there could be money to be saved by a great many small and medium businesses around the country if their knowledge of tax allowances and reliefs were improved.
“Business owners are busy people. They are focused on perfecting their product, serving customers, and making sure the bills get paid. This doesn’t always leave time for checking out the latest tax relief benefits,” noted Emma Jones from Enterprise Nation, a business support organisation that helped Direct Line carry out its recent research.
“My advice is to find an accountant who can be your go-to person for understanding what’s best for the business from a tax and accounting perspective.”
Among the various subjects about which SME bosses are being encouraged to improve their knowledge are corporation tax allowances, small business rates relief, entrepreneurs’ relief and employment allowances.