Small business owners in Kirklees have been urged to rethink how they operate – after firms in the sector UK-wide paid £4.22bn more than necessary in tax last year.

About 1.3m businesses are classed as sole traders and partnerships – throwing away an average £3,246 a year by not becoming a limited company, according to a Small Business Tax Action Report by Unbiased.co.uk. 

Nick Brook of TaxAssist Accountants in Lockwood, said: “The feedback we are getting from small businesses is that whilst trading conditions remain tough, things do seem to be looking up and securing finance for future growth is increasingly important. 

“We have been working hard with our small business clients to make tax savings where possible and one of the first things we look at is their business structure. 

“Whilst there is undeniably more paperwork involved in becoming a limited company, the financial benefits can be huge; as well as making it easier to obtain finance, it is often far more tax efficient.”