Small businesses are hit hardest by a company tax system that costs companies around £10 million a year in administration costs, according to a tax group.
As self-assessment deadline day looms large, accountancy body the AAT researched views from 500 businesses and calculated that SMEs will spend around £9.9 billion this year on compliance.
That compares with the estimated £100 million large firms pay to keep their books in order.
On average, the UK’s 2.25 SMEs (not including sole traders) incur £4,376, just under half the amount paid by large businesses.
While the headline cost is lower in small businesses, the AAT points out that the impact is proportionally greater because they have fewer resources to call upon.
Mark Farrar, AAT chief executive, said: “It is a strong indicator of just how hard dealing with tax can be when 80% of our members, experts at navigating through the intricacies of tax compliance, state that the UK tax system is too complicated.
“Making the tax system simpler could help to lift this extraordinary weight, diminishing the costs that SMEs face. This would give SMEs the space they need to invest in growing their business and hiring more staff - a vital component for the UK’s economic recovery.”
Seven in 10 SMEs answering the study said dealing with tax issues is too complicated, while eight in 10 accountants said the same.More on this story