SMEs believe big businesses get a better tax deal

Tax return
By Eleanor O'Neill, CA Today

2 September 2016

New research has revealed that 71% of UK SMEs feel big businesses receive greater benefit from the current tax system than smaller companies.

The study, conducted by accounting software firm FreeAgent, surveyed the owners of more than 500 UK micro-businesses to ascertain their feelings toward the taxes levied at companies in the UK.

Just 1% of respondents believed that small businesses benefit more from the tax system than larger entities. 8% said that it doesn’t benefit either more than the other.

Ed Molyneux, CEO and Co-Founder of FreeAgent, said: "Projected across the UK’s 5.2 million-strong micro-businesses sector, which accounts for 95% of all businesses, these results equate to millions of self-employed people who view the tax system with a sense of injustice.

“We know that corporation tax is often a stumbling block for micro-business owners to deal with, especially when they change from being a sole trader to a limited company.

"It can be a very confusing tax to understand and many of them have to work very hard to calculate the correct amount to pay - with the shadow of the tax man looming if they get things wrong.”

Previous research from FreeAgent also showed that 43% of British micro-business owners and freelancers do not know about the UK’s tax digitisation plans, under which they will be required to keep digital financial records and provide HMRC with quarterly tax updates..

This survey comes in the same week that the European Commission ruled that an ongoing tax agreement between Apple and the Irish government is illegal under state aid guidelines. The company has been ordered to repay €13bn (£11bn) in undue tax breaks.

Ed Molyneux added: "I’m sure many micro-business owners will therefore be happy to see a major multinational company being made to pay their fair share."

Apple and Ireland are expected to appeal the decision.

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  • CA life
  • Accountancy

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