'Changes needed to small business tax'

News Article - 20 June 2007
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The House of Lords has been told by various accounting professionals that structural changes are necessary in the taxation of smaller firms.

Peers agreed with requests made from bodies including the Institute of Chartered Accountants in England and Wales that structural difficulties within the taxation system were causing problems in that those working through companies or for themselves had big differences in terms of the amount of tax they paid.

The agreement was reached at a recent meeting of the Lords economic affairs committee following the review of managed service company cutbacks in the finance bill.

Tory chairman Lord Wakeham said: "More action is needed to level out tax rates for employees and the self-employed to discourage people misrepresenting their true employment status to achieve tax benefits."

Earlier this month, the Conservative Party said that it would look to reverse the chancellor's small business tax rise should it come to power.

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