Prime Accountants have highlighted recently published figures which show that for the 2024/2025 tax year, small businesses accounted for 62 per cent of the tax gap – the difference between the amount of tax owed and the amount collected.
In that tax year, the tax gap reached a staggering £59.2 billion, approximately 6.4 per cent of all tax owed.
Paislei Godley, a director at Prime Acccountants, said: “While not completely responsible for the entirety of the tax gap, 62 per cent is a disproportionate amount of the value to be contributing.
“Small businesses will now be facing more scrutiny from HMRC than ever before as they try to close the tax gap.
“While often the errors are unintentional, it will soon be the case that enquiries and penalties will roll in.”
In the 2024/2025 tax year, businesses paid a total of £308.6 billion in tax, with Corporation Tax and employer National Insurance Contributions representing 64 per cent of the tax burden.
Paislei said: “Businesses first need to understand the gap to then look inwardly to fix it.
“It is often the case that small businesses just need to clean up their books, building clear, defensible audit trails.
“An accountant can support you with implementing software that makes bookkeeping simple so that you can be in line with tax rules.
“There should also be consideration paid to using all available reliefs. While this may seem counterproductive, there are ways that small businesses can minimise their tax burden while remaining compliant.
“Accountants can support you through all of this. We are here to make sure that you are paying the correct tax to avoid HMRC investigations.”
