Tax burden too high for SMEs

The administrative burden of complying with tax regulations is much higher
for small and medium-sized businesses (SMEs) than for larger companies, a report
by HM Revenue & Customs has revealed.

Based on research by KPMG, it showed that the collective cost of filling in
tax returns and dealing with tax administration was nearly £2bn a year for
companies of between one and nine employees, compared with £642mn a year for
those with more than 250 employees.

Filling in tax returns and application forms costs businesses with no
employees (or nano businesses) about £1.2bn a year.

Steven Hill, policy adviser at the British Chambers of Commerce said: ‘The
report confirms what we all know about the tax system. It is regressive. The
absolute burden of the tax regime may be bigger for large businesses, but the
relative burden on smaller businesses is much bigger, as they have fewer
resources.’