Small businesses strangled by red tape
Wednesday 25th May 2011
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.
They found that 15% of small business owners struggle to understand new regulation or legislation.
The study also revealed that nearly one in ten small business owners (9%) admit they have made late VAT payments and around 470,000 enterprises (10%) have missed crucial tax returns and payments.
With late VAT returns and payment attracting fines of up to 15% of the tax due, and late tax returns for small business owners themselves increasing to up to £1300 from last April, the cost easily runs in to millions of pounds.
Clydesdale and Yorkshire Banks also estimate that nearly 100,000 small businesses (2%) have been fined for failing to keep on top of new laws and regulations.
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 advise 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."
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