Simplifying the UK's tax system will have a range of benefits for small businesses, it has been claimed. Andrew Hubbard, immediate past president of the Chartered Institute of Taxation, said companies operating in the sector are subject to a number of quite complex rules, which continue to change year-on-year.
He said small business taxation has become "a very unstable system" due to the large number of anomalies. "Small businesses and their advisors will spend a lot of time playing around with the numbers, trying to work out what the best way to structure them is as opposed to getting on with running the business," Mr Hubbard said. He commented that the boundary between employment and self-employment has been a very difficult area. "In many ways, it is an advantage to be self-employed because from an individual's perspective you are not under PAYE, you've got much more opportunity for claiming relief under expenses and you only pay your tax twice a year," Mr Hubbard explained.
Gareth Osborne of APA said "We need to create a simple system that gives new businesses stability so that they know what tax regime they are going to need for the foreseeable future and then help them genuinely understand it. At present, the burdens on small businesses in terms of the complexity of the tax system take up a disproportionate amount of time.”
Chancellor George Osborne announced this week that the Office for Tax Simplification has now been officially established. Let’s all hope it can make an immediate impact.
APA
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