PRESS RELEASE: 3rd December 2025
New Whitepaper research says:
- 96% of entrepreneurs aged 18–24 fined by HMRC in the past year
- £3.8 billion in lost interest from idle SME capital
- Young founders spend twice as long managing finances as over-65s
New research from financial automation company Money Squirrel reveals a deepening generational divide in the UK’s small business economy, with young, digitally savvy entrepreneurs crippled by tax fines, while older owners forfeit billions in potential interest.
The study, conducted by OnePoll as part of the new Money Squirrel Whitepaper ‘Small Business, Big Interest’, surveyed 2,500 small and micro business owners and paints a striking picture of systemic inefficiency across the UK’s £2.5 trillion SME sector.
Key findings show that 96% of entrepreneurs aged 18–24 have been fined or charged interest by HMRC for late or missed tax payments in the past 12 months, while 46% of SMEs admit they are short of cash when tax bills are due.
In contrast, one in ten business owners overall have never checked the interest rate on their business accounts, effectively leaving billions of pounds dormant, even as the Bank of England’s base rate has remained above 5% for nearly two years.
While digital adoption is highest among under-35s, these entrepreneurs are paradoxically the most likely to face penalties, a phenomenon dubbed “the automation trap.”
“If 96% of young business owners are fined, that’s not operator error, it’s a system failure,” said Andreea Daly, founder of Money Squirrel. “Automation tools like ours make it easy to reserve cash in high-interest business accounts, yet there’s still no way to link directly with HMRC. The UK’s youngest entrepreneurs are running their businesses digitally, yet being punished for doing so.”
The research also reveals that young business owners are paying a second price, not just in fines, but in time.
A significant proportion of UK entrepreneurs devote large portions of their working week to financial administration, revealing what Money Squirrel calls the “time tax” on entrepreneurship.
- 27% spend between 31 and 60 minutes per week managing their finances.
- 22% spend 1–2 hours per week, and
- 18% spend three or more hours on financial administration tasks such as preparing for tax liabilities or reconciling accounts.
63% of entrepreneurs aged 18–24 spend up to an hour per week on financial management, and the 25–34 age group spends the most overall, averaging 133 minutes per week. In contrast, business owners aged 65 and over, spend just 54 minutes per week.
“Time is a tax too,” added Daly. “Younger entrepreneurs are spending hours every week managing tasks that should be automated and still facing penalties. That’s a structural inefficiency, not a lack of effort.”
This significant investment of time, particularly among younger business owners, sets the stage for more severe financial consequences when overburdened entrepreneurs and inadequate systems inevitably lead to errors and oversights.
At the other end, more established owners, often sitting on significant cash reserves, are forfeiting billions by failing to optimise their business capital.
Despite high savings rates and open-banking opportunities, 10% of business owners have never checked their savings rate, and nearly one-third of over-55s haven’t reviewed theirs in the past year.
Analysis of self-reported balances suggests that this complacency could be costing UK SMEs over £3.8 billion annually in lost interest, enough to fund 60,000 new start-ups each year.
“Leaving capital idle in a 0% account is the silent killer of small business efficiency,” said Daly. “Younger founders are being fined; older owners are missing earnings. Both sides are losing, one through friction, the other through inertia.”
Ends
About Money Squirrel
Money Squirrel helps small business owners automate savings, optimise cashflow, and maximise returns. Its smart platform simplifies tax saving and interest, supporting the UK’s SMEs in building financial resilience.
About the Research
OnePoll conducted the survey of 2,500 micro and small business owners across the UK during a 10-day period in October 2025.
Full results are available on request.
