Two thirds of small businesses believe respite on indirect taxes such as Value Added Tax (VAT) will be most beneficial to them during the recession, while a massive 75% feel the government should do more to help, according to a new survey.
In research conducted by Intuit, the provider of QuickBooks business and financial management solutions, small businesses highlighted the issues that are most affecting them and would like to see tackled in the annual Budget in April 2009.
According to the survey, accountants often have to advise on poor payment practices. While unfavourable bank charges were of most concern to 50% of those surveyed, 40% said late payments were problematic. As a result, 21% of respondents wanted to see initiatives in the upcoming Budget to ensure late payments are reduced.
However, top of the list of the main measures small businesses would like to see in April is a reduction of the employers’ National Insurance contribution rate, as required by 46% of those surveyed. A further deferral of the rate increase of corporation tax (27%) and extension of VAT reduction to 15% for a further 12 months (21%) also featured in the top five, reflecting the demand for tax relief in the current climate.
Expressing their disillusionment at government attempts to address their needs, only 10% of respondents believe that the Budget will include any measures that will have a positive impact on their businesses.
Furthermore, relatively few small businesses have seen or expect to see actual benefits from the initiatives announced in the Pre-Budget Report published in November 2008.
Only 11% of respondents said that these initiatives, such as the additional tax relief to businesses making losses, have helped their business.
The most popular measure in the Pre-Budget Report was the VAT reduction, with 23% of respondents claiming this had helped their business, but even that figure was small in comparison to the 56% who felt none of the key initiatives for small businesses had benefited them.
Mark Wordley, of ASUK Accountants based in Staffordshire, and Intuit UK ProAdvisor, says it is not surprising that small businesses would most like to see measures to reduce the tax burden in the April Budget:
“That 25% of survey respondents fear going under unless the economy turns around in the next year is a clear indication that the government needs to address the needs of small businesses. Providing relief on hidden taxes such as employers’ National Insurance contribution and VAT is the first step as they are crippling small businesses. Accountants are increasingly having to deal with clients unable to pay their taxes and contacting the government’s Business Payment Support Service Helpline asking to spread out payments," he explained, adding:
“The issue of late payments continues to be a thorn in the side of many small businesses. The survey results reiterate that the current legislation is inadequate but also highlights that the problem of late payments is very difficult to address. Any tougher legislation could affect customer-supplier relationships.”
Diana Flier, compliance analyst at Intuit UK, says that small businesses should be getting more help and that with the right support, they can not only stay afloat but thrive in the current slowdown:
“Regardless of government intervention, good sound credit control practices can help small businesses better protect themselves from late payments. This is where accountants can be more than book keepers and year-end auditors, and take a more active role in helping small businesses. There are clearly opportunities for accountants to provide appropriate advice on how to better manage cash flow as well as advise clients on how to minimize their tax liabilities."
“Small businesses can also help themselves by being aware of how much money is being spent, tracking VAT and making accurate returns, and identifying potential cash flow problems before they occur. This calls for processes to monitor and track finances, as well as to prepare a cash flow forecast, which accountants can advise their clients on,” she added.
The survey is based on responses from 234 of Intuit’s small business customers in the UK and was conducted online in March 2009.
.
Network Tweets
Network BlogsContent
provided by
|
Archive | Resources | Partners | Site Map | Links | Newsletter Archive | Contact | RSS Feeds | About | Syndication | Advertising & Marketing | Recruitment | Terms & Conditions | Privacy
Copyright © 2012 - All Rights Reserved - Tax-News.com
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment