There always seems to be bad news about another massive corporation paying little to no tax, or a senior manager accused of sexual misconduct. But what often doesn’t get reported are the GOOD NEWS stories of the economy… News about people running and working in SME businesses that actually keep the UK economy going and supporting local communities.
In case you didn’t know, SMEs are businesses that employ up to 250 staff. Businesses are generally broken down into the following 4 types of business:
- Micro 0-9 employees
- Small 10-49 employees
- Medium 50-249 employees
- Large 250+ employees
SMEs are Micro, Small or Medium businesses.
As an SME owner it’s easy to think that, against the wider economy, you’re a small fish in a big pond. But in many ways, nothing could be further from the truth! Here are some interesting figures about SMEs…
Tax
In 2018, HMRC received £56.2 billion in Corporation Tax *1 Out of that, £30.6 billion received was from SMEs. This is from a collective SME turnover of £2 trillion. *2 That’s 54% of all corporation tax in the UK paid by SMEs. And to break that down further, Micro and Small businesses pay the most tax proportionally of all.
So whilst some of the largest businesses in the UK pay little or no tax, SME businesses like yours pay the majority of corporation tax. And we haven’t even factored in income tax!
Employment
In 2018, there were over 31 million people employed in the UK. *3 Out of that, over 16 million were employed by SMEs – over half the workforce. *4The remainder were employed by large businesses (250+) or public services such as the NHS. So again – the SMEs drive a majority of the workforce and salaries for the UK.
We could be heroes – for more than one day…
Despite the fact that SMEs contribute a massive wedge to the UK economy, we often seem to be the furthest away from policy makers to be able to make our voices heard. When it comes to policies or tax brackets we’re often on the receiving end. Unlike the chairman of a Fortune 500 company who regularly plays golf with your local MP or Prime Minister… who ironically will pay less tax and offers much less to the economy. That’s why it’s so important to be part of a larger body such as the Federation of Small Business or the local Chamber of Commerce. There is safety in numbers!
Beyond profit
It’s not just about the economy either. SMEs like claireLOGIC put many resources into things that matter – such as team culture, Corporate Social Responsibility (CSR) and team learning. All these things contribute towards a positive effect on the wider workforce, and subsequently to the wider population! There is power in the SME.
Conclusions
- If you run an SME you are at the cutting edge of the UK workforce
- Positive changes you make to your teams have a big impact on the population
- SMEs make a big impact on the UK
Sources
* 1 – HMRC * 2 – The IoD * 3 – Office of National Statistics * 4 – Federation of Small Businesses
