By Max Clarke
Britain's 4.8 million small businesses are struggling to understand and cope with complicated business regulation, costing them millions in fines and lost revenue every year.
15 per cent of small business owners struggle to understand new regulation or legislation, a poll of more than 500 small businesses commissioned by Clydesdale and Yorkshire Banks has found.
The study also revealed that nearly one in ten small business owners admit they have made late VAT payments and around 470,000 enterprises 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 have been fined for failing to keep on top of new laws and regulations.
"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,” said Gary Lumby, director of small business banking at Clydesdale and Yorkshire Banks. ”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.
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 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.
"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 provides specialist advice, help and resources for a number of roles required to run a small business. The hub can be vieed here