Britain’s 4.7 million small businesses* are struggling to understand and cope with complicated business regulation, costing them millions in fines and lost revenue every year, according to Clydesdale and Yorkshire Banks.
The new research for Clydesdale and Yorkshire Banks Small Business found that 15 per cent of small business owners struggle to understand new regulation or legislation. The poll of more than 500 small businesses nationwide was commissioned to understand the issues that are currently facing small enterprises.
The study also revealed that nearly one in ten small business owners (nine per cent) admit they have made late VAT payments and around 470,000* enterprises (10 per cent) have missed crucial tax returns and payments.
With late VAT returns and payment attracting fines of up to 15 per cent of the tax due, and late tax returns for small business owners themselves increasing to up to £1,300 from last April, the cost easily runs in to millions of pounds. Clydesdale and Yorkshire Banks also estimate that nearly 100,000* small businesses (two per cent) have been fined for failing to keep on top of new laws and regulations.
In addition to falling foul of rules and regulation, many small businesses are not taking advantage of the law. Nearly a fifth of those questioned (19 per cent) admitted missing out on revenue-boosting grants and tax breaks and up to 1 million small firms could therefore be paying unnecessary tax or not receiving payments from the Government they are entitled to claim. This comes as little surprise when the research showed that around 16 per cent of small businesses are unsure of where to go for advice on issues such as regulation.
Gary Lumby, director of small business banking at Clydesdale and Yorkshire Banks, said:
“For small businesses every penny really does count, so the cost of falling foul of red tape can make a fundamental difference to their ability to succeed. In extreme cases, not understanding red tape could lead to them closing. It is worrying that a significant number of small firms do not know where to turn for advice on these matters, and we hope to change that for our customers.
“We believe that Small Business is not just about money, but about knowledge, advice and contacts. Our role in pointing small businesses in the direction of people who can help, support and advice is every bit as important as the finance and banking facilities we provide. The recent launch of an online support hub in partnership with the Forum of Private Business is a perfect example of this.”
The Banks’ new online support hub is operated by the Forum of Private Business, the leading not-for-profit business support organisation, and provides specialist advice, help and resources for a number of key roles required to run a small business, including Finance Director, HR Director and Legal Director. Small Businesses can use many of the tools for free, or access more enhanced supported for a small monthly subscription; choosing elements to help their business grow, and different levels of support depending on their size and needs. More information can be found at: http://www.cbonline.co.uk/business/under-1m/business-under-1m.
*4.7million small businesses in Great Britain source: Department for Business Innovation & Skills April 2011.