SMEs are missing out on millions of pounds on offer from tax relief, new research has found. Direct Line for Business surveyed 180 SMEs and found the general understanding of what tax reliefs are available, and how to access them, is severely limited.
Nearly half of SMEs have a “very poor” understanding of the government tax relief available, which amounts to nearly 3.5 million SMEs across the UK2 that may not be fully utilising the available tax benefits.
The survey showed that two thirds (66 per cent) are unsure of the tax relief measures they could be eligible to claim, while over a third (36%) of SMEs unaware of any existing tax relief measures. Worryingly, 7 per cent of SME owners thought that they are not eligible for any tax relief measures at all.
In particular, Direct Line pinpointed SME ignorance several tax relief schemes: 19% of SMEs were aware of Entrepreneurs’ Relief, with only 4% believing they might be eligible; while the figures for Enterprise Zone relief were 7% and 1%.
Nick Breton, Head of Direct Line for Business said: “Small enterprises account for over 99 per cent of the UK’s businesses so they are truly the backbone of our economy. However, this research highlights that there is a lack of awareness of the benefits available to small business owners which can ultimately impact the development and growth of their business.
“The research shows that two thirds (66 per cent) of SME owners do no know whether they are eligible for any tax relief measures so we would encourage them to do some research and seek help if necessary to make sure they are taking full advantage of the benefits.