Government messages on investment and growth, MTD and net zero are not landing outside of London, adding to the SME north-south divide, according to the ACCA.
SMEs are most frequently seeking accountants’ professional advice on immediate issues such as routine compliance, business planning and cashflow, rather than future plans for growth, environmental, social and governance (ESG) reporting and R&D innovation.
That’s the conclusion of the latest ACCA UK and Corporate Finance Network SME Tracker, which highlights a concerning trend that sees SMEs failing to spend time thinking about their long-term survival.
Just 17% of SMEs outside London ready for MTD
The analysis also reveals a north-south divide for SMEs regarding their compliance with and awareness of a key government scheme – Making Tax Digital (MTD). Half of advisors in London say SMEs will be ready to comply with the MTD initiative, compared with just 17% outside of London.
There are already concerns over the rollout of MTD, which aims to remove paper-based tax filing, and presently involves online submission of VAT. In the future, it will cover Corporation Tax and income tax, too.
42% of SMEs unaware of Help to Grow initiative
Across the UK, SMEs remain unaware of the government’s flagship Help to Grow scheme, which aims to increase SMEs’ productivity. Some 42% of accountants say their SME clients have not enquired about it or do not know what it is.
A further 43% of accountants say that fewer than 10% of their clients have mentioned the scheme at all. The north-south divide exists here too, with SMEs in London more likely to be aware of the scheme – 16% of accountants reported that over half of their client base was enquiring about it, compared with just 3% of accountants outside of the English capital.