One in five small and medium-sized enterprises (SMEs) said they expected it would get harder to pay tax bills over the next year as tax rises came in, research from Premium Credit found.
Many businesses said the increase in employers’ national insurance from April added to their concerns.
Around 20% of SMEs, which is about a million companies, said paying tax would become harder in the next year due to tax rises.
28% said it was very or quite likely their firm would struggle to pay a tax bill in the next five years.
Since the start of the cost of living crisis, 21% said it had already become more difficult to pay tax bills.
Currently, one in 12 (8%) of the UK’s 5.487 million SMEs said they were struggling to pay tax bills, unchanged from last year.
Of those struggling, 47% said they were having trouble with VAT and 44% with corporation tax.
More than a third (35%) of those struggling said they would try to agree to a longer payment period with HMRC.
29% said they would take on more work to cover the bill, and 27% said they would take out a loan.
Over the past 10 years, 15% of SMEs said they had struggled to pay tax bills.
25% of these owed more than £50,000. 32% said they had agreed payment deals with HMRC, while 19% said they had laid off staff to pay the bill.
Jennie Hill (pictured), chief commercial officer at Premium Credit (specialist finance), said: “Paying tax bills is a long-running issue for SMEs and the latest tax increases are expected to add further pressure.
“Of course firms should plan ahead and ensure they have money set aside to meet bills when they are due but cashflow issues can be a problem and owners will be focused on running their business effectively.
“Any company which is struggling should consider spreading the cost into convenient monthly payments to help them pay their tax on time and improve vital cashflow.”
