TaxCorporate TaxTax burden higher than fuel costs for SMEs

Tax burden higher than fuel costs for SMEs

New research reveals small businesses in the UK are devoting more than a sixth of their overall expenditure to meeting tax requirements

SMEs are spending an average of 15.7% of their total expenditure costs in
fulfilling tax obligations, according to new research.

Figures released by business information company Creditsafe also reveal SMEs
with a turnover of £1m-£5m are attributing the greatest proportion of revenue to
tax – 18.5%.

Tax ranks third in the league table of total business expenditure for SMEs,
with wages accounting for almost a third (29%) of total expenditure and
investment in stock and materials (17.5%). Fuel costs now account for 10% of
overall costs.

David Knowles, marketing director of Creditsafe, said the tax burden on SMEs
impacts profitability and the level of investment businesses can pour into other
areas, such as expanding into new markets.

‘Many firms are struggling to survive as a result of restricted cash flow. A
growing propensity for firms to hold onto their cash and delay payments,
combined with reticence on behalf of the banks to offer credit, could drive many
SMEs to the wall in 2009,’ he said.

Further Reading:

Loss
offset extension of limited use for SMEs

HMRC
tax helpline inundated

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