Last updated: 11 Sep 2023 11:00 Posted in:
Small and medium-sized companies in the UK are struggling to pay their tax bills, according to a study carried out by Premium Credit of more than 550,000 SMEs.
Its research found that around 10% of UK’s 5.5 million SMEs say they are struggling to pay what they owe HMRC, although 15% say they have had issues paying them in the past 10 years. The average bill owed was more than £45,600; however, 10% of respondents had problems with bills of more than £100,000.
And their tax problems could be set to get worse, the research found. Around a fifth of SMEs (19%) say affording tax bills has become more difficult because of the cost-of-living crisis and more than a quarter (26%) say it is likely they will struggle to pay one or more tax bills in the next five years.
The two biggest ‘problem’ taxes are Corporation Tax and VAT – more than half (54%) of those surveyed say their issue is with Corporation Tax, while 35% say they have issues with VAT.
Jennie Hill, chief commercial officer, Premium Credit (Specialist Lending) said: “SME finances are inevitably under pressure from the cost-of-living crisis and that has an impact on their ability to meet tax obligations but paying tax bills is a long-standing issue for companies and is certain to remain so.
“Failing to pay bills on time will lead to fines from HMRC so any company which is struggling should consider spreading the cost for up to a year, which for a small fee will help them to pay bills on time and improve cashflow when it is needed.”
"Failing to pay bills on time will lead to fines from HMRC so any company which is struggling should consider spreading the cost for up to a year, which for a small fee will help them to pay bills on time and improve cashflow when it is needed."
Jennie Hill, Chief Commercial Officer, Premium Credit (Specialist Lending)