A third of Britain’s small business owners are unaware how much they will pay in corporation tax this year, because they are unaware of recent changes to the tax regime, according to new research from Bank of Scotland Business Banking.
Thirty five per cent of Britain’s entrepreneurs are oblivious to the impact that recent changes to the tax regime have had upon their business’ financial affairs, the survey into financial literacy levels has found.
However, despite the fact that an understanding of tax is somewhat lacking amongst Britain’s small business community, it seems to display an otherwise high level of financial literacy, with 90% claiming to understand the rules, processes and procedures for managing their business’ financial affairs affectively, even though 75% have no training or qualifications of a financial nature.
Hands-on experience seems to account for this level of understanding – only 19% of small business owners are reliant upon external assistance to help manage their financial affairs, while more than half take complete financial responsibility.
Mark Curran, Head of Relationship Management at Bank of Scotland Business Banking said: “Small business owners are confident in their own abilities to administer the financial management of their businesses - a skill which appears to have been largely self-taught. Such a high level of financial literacy can only be good news for the economy, leading to fewer insolvencies resulting from financial mismanagement.
“Despite this, there is still a great deal of confusion surrounding the overly-complicated tax regime for SMEs. With so many small business owners taking responsibility for the management of their financial affairs, it's vital that they are able to understand their tax liabilities. Simplification of the tax regime for SMEs is required if this knowledge gap is to be filled.”
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