During the 2016/17 tax year, an additional £474m in corporate tax was collected from SMEs in the UK. This data was collected by an accountancy group, UHY Hacker Young. The focus on targeting SMEs has meant that the HMRC have increased the amount of cash they received by 5% comparing to the previous tax year of 2015/16.
However, as there has been more targeting on SMEs, many believe this is an unfair targeting on self-employed and the HMRC should be focusing on the larger firms. A spokesperson for the UHY has said that small businesses have been put under the spotlight due to them being an easy target compared to many of the larger firms.
This singling out of the SMEs may be due to the fact that they are not bringing in enough tax, and therefore are going after easy companies to try and close the ‘tax-gap’.
Therefore, this being said, SMEs are being warned to make sure their accounts are up to date, and taking important steps to improve record keeping and research into new laws and regulations.
What is an SME?
SME stands for ‘small and medium sized enterprise’. In order to declare yourself as an SME to the government, you will have to ensure you fit in the guidelines. Below is the official benchmark set out by the EU.
Size Employee number
Micro business less than 10
Small business Between 11 and 50
Medium business Between 51 and 250
Large business Between 251 and 1000
Enterprise More than 1000
Size Turnover in one year
Micro business less than £1,400,000
Small business Between £1,400,000 and £7,000,000
Medium business Between £7,000,000 and £36,000,000
Large business More than £36,000,000
As long as your business fits in these criteria’s, you will be able to declare yourself as an SME.
For more information, don’t hesitate to contact us.