FSB welcomes OTS review on small business taxation
FSB welcomes OTS review on small business taxation
Commenting on the Office of Tax Simplification (OTS) small company taxation review, Mike Cherry, Policy Director at the Federation of Small Businesses, said:
“This OTS review has made a numbers of important recommendations which should help small businesses but we would like to see a bolder approach. Our members have told us there is a pressing need to simplify the tax system and reduce administrative burdens. FSB has submitted its own recommendations [1] on how to radically simplify and overhaul the complexity of the current tax system. This details the benefits simplification can bring to the economy and to the exchequer, boosting growth and productivity as well as improving compliance and lowering the costs of doing business.
“As the report rightly recognises, the small business community is not a uniform group of taxpayers. We believe simplification should be tailored to different types of firms by creating a far more user-friendly and ‘tax-payer centric’ system. Such a system would recognise that compliance costs faced by companies differ at different stages of their life cycle. We are greatly encouraged by the report’s recommendation of producing a future study into a consolidated tax model for micro companies – including using turnover as a basis for tax. Our research has demonstrated the clear benefits of including a number of separate taxes into a single payment for small businesses, which offers the potential for a significant reduction in tax complexity for small firms.
“We are pleased to see the OTS’s call to be involved in the development of HMRC’s Making Tax Digital agenda to ensure simplification issues are considered. Pursuing the digital agenda without simplifying the tax system will simply cause consternation across the small business community, especially among those who are not able to complete tax returns online. The report also notes the enormous concern and confusion around proposals for mandatory quarterly digital reporting. For many businesses, these proposals would be disproportionately burdensome and act as a potential barrier towards the creation of more start-ups in the UK.”