22% of SMEs fear tax bills could force them out of business

More than 1 in 5 SMEs fear they could be forced out of business over problems paying tax bills in the next 5 years, according to research from Premium Credit.

The finance provider found 22% of SME owners and managers were concerned tax payment problems could threaten their survival.

The research also found 39% of SMEs had missed up to 4 tax bill deadlines in the past 3 years, while 55% admitted they had been late filing a VAT or Corporation Tax return during the same period.

Premium Credit said the findings highlighted the pressure on SMEs as they manage tax bills, rising costs and cash flow demands.

The study found 71% of firms would consider using a scheme that enabled them to spread the cost of tax bills for a small fee, while 73% said they were aware they could spread the cost of tax bills throughout the year with HMRC.

Premium Credit said missed tax payment and return deadlines could be expensive for businesses, with penalties ranging from £100 for being 1 day late with a Corporation Tax return to as much as 20% of unpaid tax. VAT fines for paying late start after payment is 15 days overdue and can rise to 15% of the VAT not paid on time.

Around 13% of SMEs said they were very worried about fines from HMRC.

The research also found 44% of SMEs believe HMRC has become more supportive towards business owners, compared with 31% who think it is getting tougher.