SME Owners Would Pay for a Simpler Tax System

Small business Owners Would PAY for a Simpler Tax SystemMore than half of small-business owners would be willing to pay more tax in exchange for a simplified system with less red tape, research from the Forum of Private Business (FPB) has found.

A survey of the FPB’s Tax and Budget focus group revealed that 57% of small-business owners would support a “radical tax simplification programme” even if it meant a larger tax bill.

Taxes that respondents pinpointed as onerous included National Insurance (NI), PAYE and business rates. For all three, more than half of business owners thought the administration of the rules and the choice of businesses to target could be improved.

FPB research manager, Thomas Parry, said that tax administration is seen as a barrier to growth for small firms.

“Small businesses would be prepared to pay a little more in tax, if as a result there was simplification and a reduction in a number of taxes, leading to greater profitability. Businesses feel that if certain regulations and restrictions were reduced or removed, they would be able to grow their business faster.”

The research also found that 78% of businesses said that the tax system deters small firms from employing people, due to the complexity of payroll taxes and NI increases.

Small-business owner, Billy Pinches, founder of Henley Plant Hire, said that tax legislation is “a nightmare” for his business.

“We’re spending more and more time form-filling. PAYE and VAT are the worst for us. There must be a simpler system.”

The Government said it has recognised the need to simplify tax by setting up the Office of Tax Simplification (OTS) to provide advice to the Chancellor. The OTS is currently carrying out two reviews — on tax allowances and reliefs, and small-business taxation.

“The OTS team have been getting views of large and small businesses, tax advisers, taxpayers and industry groups.”

said an OTS spokesman.

“All recognise that some improvements can be made to the tax system, and the OTS is looking at realistic options to help make things easier for businesses and taxpayers in general. We will publish our reports on this review ahead of the 2011 Budget.”

For further information see our business advice articles on Tax and National Insurance and PAYE and Payroll Guide.

SME Owners Would Pay for a Simpler Tax System

Leave a Reply

Your email address will not be published. Required fields are marked *


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>