Osborne told to unveil simpler, clearer taxation
George Osborne is being urged to use next month’s Budget to simplify taxes for big and small firms alike, just as new figures suggest the tiniest of traders need such reform too.
Appealing to the chancellor ahead of his July 8th address, the Federation of Small Businesses told him that more than half its members want him to introduce a more simplified tax system.
In a similar submission to Mr Osborne, the CBI signalled that his first Budget since retaining his chancellorship should provide “clarity on the full range of business taxes”.
This would “spur on entrepreneurship,” as would a move in nine days’ time to set the Annual Investment Allowance at £250,000 and make it permanent from 2016, the group said.
Under a ‘Business Tax Roadmap’ that the CBI handed the chancellor, it also wants to see him make what it called a “renewed commitment to good tax policy-making principles.”
Mr Osborne’s vision on how he’ll use employment taxes to create jobs and source talent from overseas, while giving HMRC “proper resources” so it can be fit for 2020, is also on the map.
But it is the resources of micro-businesses to ensure compliance with HMRC that is troubling an accountancy group, so much so that it commissioned YouGov to measure the effects.
The pollster found that almost 25% of such owner-manager firms have to spend more than a working day – the maximum recommended time – doing monthly accounts and bookkeeping.
“A typical micro-business should need to spend no more than eight hours every month to manage their accounts”, said FreeAgent, which commissioned the poll. “[But] some even spend 6 days or more and that’s time that all adds up.”
In line with the concern, the CBI said ensuring the tax system does not act as a barrier to ambitious firms should be a priority for Mr Osborne, as should removing its complexities so that it is “fit for modern business.”
28th June 2015