Member News
A group that supports small business has welcomed an interim report on taxation by the Office of Tax Simplification (OTS).
The report recommends merging income tax and national insurance and other measures to simplify HMRC procedures and lessen the administrative burdens on small business.
The OTS expects chancellor George Osborne to respond to the report at or shortly after the Budget on March 23, setting out which areas he wants the OTS to explore in more detail, and setting a deadline for a final report.
Forum of Private Business spokesman Phil McCabe said:
"Broadly, we welcome the approach taken by the OTS review of the small business tax system, which appears to be generally 'pro-business', but is also focused on operational issues as well.
"We have been calling for the alignment of income tax and national insurance for a number of years, and believe that it would address the current mismatch, reduce administration by allowing entrepreneurs to deal with them both at the same time, and ease resentment borne out of the often-held belief that NI (a tax on employment) is a 'stealth tax'.
"We also feel that the simplification of allowances and tax reliefs should support entrepreneurism and innovation.
"We do feel that more should be done to incentivise investment in the UK and feel that lack of stability has limited the effectiveness of initiatives such as the annual investment allowance.
"It is important that this is a start to a broader simplification of the tax system that will take years to resolve and changes highlighted to businesses so that they ensure that they benefit from any changes made.
"In this sense the focus on communication through flow charts rather than jargonised reports will help considerably."
John Whiting, OTS tax director, said:
"Our aim is develop practical ideas that will make things easier for small businesses when it comes to their tax responsibilities.
"Having listened to the concerns raised through our roadshow events and many representations, we hope we've identified the main problem areas and that people will agree these initial recommendations will improve matters.
"We've suggested ways forward on the thorny issue of IR35, though it's clear there is no easy solution there.
"We want to stimulate more debate on our findings, so whether you agree with us or not, we are keen to hear your views to help us develop our final report to the chancellor later in the year."
The interim report setting out the recommendations for the small business tax review can be found on the OTS website.
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