| Almost 50% of small businesses do not set money aside to pay their corporation tax bill, according to research by Alliance and Leicester Commercial Bank.
Cash flow is always an issue for small and start-up companies, so putting aside money to prepare for the inevitable bill can help you cope with the additional cost.
“Although businesses expect a corporation tax bill, it can create sudden cash demands on a company, particularly small businesses who might already struggle with their cash flow.
“This research highlights just how ill-prepared some businesses are and it is worrying to think that they are jeopardising their future business prosperity by dipping into company profits or using their own money,” stated Steve Jennings, director of business banking for Alliance & Leicester.
Only 40% of the 723 small companies involved in the survey set aside money to pay their corporation tax.
19% claimed that they simply did not have the funds to save in advance, citing late payments from customers as the major cause behind their lack of available cash flow.
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