At Money Squirrel, we’ve spent a lot of time working with UK small business owners, and our latest research has uncovered a striking generational divide, one that’s costing entrepreneurs both time and money.
In our new Whitepaper, Small Business, Big Interest, we surveyed 2,500 small and micro business owners and found that younger entrepreneurs, while digitally savvy, are paying the highest price.
96% of founders aged 18–24 have been fined or charged interest by HMRC in the past year and almost half of all SMEs struggle to have cash available when tax bills are due.
We call this the “automation trap.” Young founders embrace digital tools and automated systems, yet the current setup still penalises them. Despite working smarter, they’re still facing fines, a problem that’s structural, not a failure on their part.
There’s also the hidden “time tax.” Young business owners are spending hours each week on financial admin tasks like preparing for tax or reconciling accounts. The 25–34 age group spends the most time, averaging over two hours per week, while business owners aged 65 and over spend less than an hour. Time that could be spent growing the business is instead swallowed by repetitive tasks.
At the other end of the spectrum, older business owners are losing out in a different way. Many haven’t checked their business account interest rates in over a year, and some never have. Our analysis suggests that this complacency could be costing UK SMEs over £3.8 billion in lost interest annually, money that could in fact fund tens of thousands of new start-ups.
From our perspective, this research shows a clear opportunity to improve SME financial infrastructure. Younger founders need seamless integration with HMRC and smarter automation tools, while older owners should be encouraged to actively optimise their capital. Both groups can benefit from a more efficient, fair system.
With the end of the year near and a fresh business year about to start, it’s more important than ever to highlight these challenges. Every pound lost, whether through fines, time wasted, or dormant cash, weakens businesses and the backbone of the UK economy. Automation and smarter money management shouldn’t just be optional, they should be a lifeline for all SME owners.
We hope our findings help entrepreneurs of every generation take control of their finances, reduce penalties, and make their money work as hard as they do.
