Surveys
Accountants, Financial Advisors Concerned About Clients’ Ability To Pay Tax Bills – Study
The economy and its impact on companies is cited as the main reason for tax payment difficulties, while around 53 per cent cited personal reasons such as divorce and 47 per cent highlighted the cost-of-living crisis among the top three.
New research from Premium Credit, a provider of finance for companies and business owners' tax bills, shows that almost all of the accountants and financial advisors (98 per cent) supporting clients' tax affairs say that the number of those struggling to pay bills has increased in the past 12 months with more than two out of five (43 per cent) reporting a dramatic increase.
Corporation tax bills are the biggest worry – 71 per cent of accountants and advisors say they are seeing the biggest increase in clients struggling to pay compared with 53 per cent who report rising numbers struggling to pay income tax and 37 per cent seeing rises in clients struggling with value-added tax bills.
The economy and its impact on companies is the main reason for tax payment difficulties - 55 per cent of those questioned said it was among their top three reasons for clients struggling with tax.
In the UK, the burden of tax is the highest it has been since the early 1950s, as a result of spending to deal with COVID-19, rising costs of healthcare, old age and a general shift towards bigger government. Controversy over how this can be reversed and taxes cut promises to be a major issue in the next UK general election.
On average, accountants and advisors now estimate that 11 per cent of clients struggle to pay tax bills, with more than a fifth (22 per cent) estimating that 15 per cent or more of clients have problems paying tax.
The study found that accountants and advisors expect the problem to worsen. In 12 months’ time, they expect the average number to rise to 14 per cent with nearly half (47 per cent) estimating that 15 per cent or more of clients will find it difficult to pay their tax bills.
The average bill clients are struggling to pay is estimated at around £100,000 ($122.8 billion) although one in 10 say that clients have problems paying tax bills of £200,000 or more.
