Third of SMEs missing out on tax breaks
A study carried out by RSM Tenon finds a third of SMEs are unaware of any tax breaks which might benefit their businesses
A THIRD of small- and medium-sized enterprises could be failing to take advantage of tax breaks.
According to quarterly research carried out by RSM Tenon, 33% of SMEs were unaware tax breaks that could potentially benefit their companies existed, with the highest portion – 37% – based in the north.
The most popular tax break was the reduction in the corporation tax, with 33% valuing it highest, followed by business rates at 13%.
Only one in ten of the SMEs surveyed said that they considered research and development (R&D) tax credits to be the most beneficial to their business, despite the government increasing them by 225% last April in a bid to encourage innovation amongst UK SMEs.
The relaxation in the Enterprise Investment Scheme (EIS) was the least popular tax break for the SMEs surveyed, with only one per cent saying it was the biggest tax break for their company.
Paul Belsman, head of tax at RSM Tenon, said the government will be disappointed with the figures.
He said: “It is interesting that despite the various tax reliefs introduced by governments, most businesses still consider the headline corporate tax rate to be the statistic they are most interested in.
“It is also disappointing that only one in three UK entrepreneurs are unaware of tax breaks that could benefit their company – again an interesting finding when you consider the effort the government puts into devising targeted tax incentives.
“This could indicate that either the government is off the mark or the incentives introduced are too complicated for many businesses to consider.”