Call for ideas to simplify small business tax<br>
Small businesses are today invited to have their say on a raft of new ideas put forward to simplify their administrative and tax obligations.
Calling for the views of all smaller businesses, and their advisors, the Office of Tax Simplification said it had proposed a range of options around two key ideas for simplification.
The first is to provide some sort of tax relief for disincorporation – when an individual wants to stop their limited company, and the second is based around providing the smallest of traders with a simpler income tax system.
Neither are firm proposals, the OTS said, rather they are “intended to get people thinking and generate a debate,” so the office can refine its thinking before putting its final recommendations to the Treasury ahead of Budget 2012.
Under the consultations, which run until October 7th, meetings and workshops will be held so small businesses can have their say on everything from “clerical changes” to the tax and administrative systems, to “more fundamental reform”.
Feedback at the road-shows, scheduled from September, and responses to the document’s two key proposals should centre on lightening the compliance burden on affected taxpayers, just as the OTS requested last year when exploring IR35.
“We have been told in no uncertain terms that tax administration can be a problem for small businesses,” the office said in a statement, referring to its previous road-shows.
“So we want to stimulate debate and allow those in business, and their advisers, to give us their views on the various possible ways forward.”
Tax director John Whiting asked: “Would a cash basis be a better way of taxing the smallest businesses? How about flat rate expense allowances? What of the more radical alternatives some other countries use – could any of them work here? Do we need a disincorporation relief? Whether you agree with these ideas or not, we are keen to hear your views.”
29th July 2011