"The UK's small business sector forms the backbone of the national economy. With 5.7 million SMEs operating across the country in 2025, including 5.4 million micro businesses, these enterprises represent 99.9% of all UK businesses. Yet according to tax experts, a significant number of these businesses are overpaying on property taxes and missing out on capital allowances that could provide much-needed funds for growth, hiring, and innovation."
"Capital allowances allow businesses to recover money spent on commercial property improvements, from refurbishments to energy-efficient upgrades. The system is designed to ease the financial burden of property investment and encourage businesses to improve their premises. However, for many SMEs, the reality falls short of this intention. The system has become too complex and outdated for the businesses it's meant to help. Unlike large corporations with in-house tax specialists, smaller businesses often lack the resources to understand what they're entitled to claim."
UK small businesses account for nearly all firms, with 5.7 million SMEs in 2025, including 5.4 million micro businesses. Many SMEs overpay property taxes and fail to claim capital allowances that could fund growth, hiring, and innovation. Capital allowances are intended to recover spending on commercial property improvements and encourage investment, but complexity and outdated rules prevent effective use. Large corporations use dedicated tax teams, while most SMEs lack specialist resources, leading to billions unclaimed annually. Simplifying allowances, improving guidance, and widening access to relief could unlock funds for equipment, energy upgrades, flexible workspaces, and business expansion.
Read at London Business News | Londonlovesbusiness.com
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