As reported by Business News Wales, one in eight small businesses admits missing crucial tax deadlines, exposing them to penalties of up to 15% of the outstanding amount, according to a study by Premium Credit
The study with SME owners and managers found 12% of firms – around 660,0002 of the UK’s 5.5 million SMEs – have missed tax payment deadlines for Corporation Tax, VAT and other taxes in the past 12 months.
Penalties and fines for missing tax deadlines range from £100 for being a day late with a Corporation Tax payment to as much as 15% of the amount of VAT not paid on time. Fines for paying VAT late only start after payment is 15 days late.
The research found that among firms missing payments in the past 12 months around 27% had missed one deadline while 38% admitted to missing between two and five deadlines. Around 7% said they had missed 15 or more deadlines for paying tax.
Premium Credit’s Tax and VAT funding proposition, which allows companies and business owners to spread the cost of their VAT, corporation tax and self-assessment tax payments for up to a year, saw a 68% rise last year in the amount it lent to fund VAT bills and a 53% increase in the amount lent for non-VAT bills.
Its research shows around a third (32%) of SMEs would consider spreading the cost of tax bills for a small fee regardless of whether they struggle to pay their bills while 33% were unsure whether they would use such a service.
Jennie Hill, Chief Commercial Officer, Premium Credit (Specialist Lending) said: “Fines and penalties for missing tax deadlines can be as high as 15% of the amount outstanding when it comes to VAT and even being a day late with Corporation Tax can mean a £100 fine.
“Spreading the cost of tax bills over a year for a small fee will help companies to plan more efficiently and avoid any risk of fines or penalties which can be crippling for a business that is already struggling to meet its tax obligations.”
Be the first to comment