A third of small business owners are unaware of how much corporation tax they have to pay this year, according to a new report.
The survey, conducted by Bank of Scotland business banking, found that 35% are unacquainted with recent government changes to tax legislation and the impact it will have on their financial state.
Aside from the lack of knowledge surrounding tax, the report found that in general British small businesses have a good understanding of financial issues.
Nine tenths of entrepreneurs claim to understand all the rules and processes to manage their finance, even though only 25% have any qualifications within this area, suggesting that many business owners learn on-the-job.
Being financially self-reliant impacts on how much time employers stay in the office – compared to a standard 35hour working week, those who jointly run a business and look after the finance on average work an extra two days weekly.
This sound financial management is all good news for the British economy. Four out of five (81%) small business owners either know exactly or have a very good idea of their cashflow situation, while three-quarters assess their cashflow position and make forecasts or projections at least once a month.
Mark Curran, the head of relationship management at Bank of Scotland business banking, said that despite the high level of financial literacy, changes need to be made to the tax regime.
“With so many small business owners taking responsibility for their financial affairs, it is vital that they are able to understand their tax liabilities,” he said.
“Simplification of the tax regime is required if this knowledge gap is to be filled.”
© Crimson Business Ltd. 2007
