Accountants urge government to simplify business taxation system

News Article - 04 April 2008
Category:

The British government should concentrate its efforts on developing a "far simpler system of taxation" for small businesses in Britain, according to a leading business accountancy firm.

Andrew Jupp, the head of tax at Tenon, has welcomed a recent ten-year strategy to boost enterprise and business growth, but stresses that it is the financial and administrative burden of taxation that is the "fundamental problem of what stops entrepreneurship and innovation".

While "the UK is slipping into recession and all Alistair Darling can talk about is stability" following the recent global credit crunch, Mr Jupp wants ministers to tackle the business taxation system before introducing more elaborate schemes.

"If you look at Corporation Tax, VAT and PAYE, the whole admin burden around accounting for tax is a huge problem in itself," he explained. "I've had small businesses saying to me: 'We can't expand to take on more people, because the hassle of having to comply with the VAT and PAYE obligations is just too great'."

Chancellor Alistair Darling announced changes to the Capital Gains Tax (CGT) taper relief system in his 2008 Budget that have been criticised by the small business community. Smaller firms are advised to adopt SME accounting software to keep up with changes to business tax systems.

Taxation was selected by 74 per cent of small business owner managers in a poll by the Small Business Research Trust as a barrier to growth. The rate of corporation tax for small businesses has increased from 20 to 21 per cent, with a further rise to 22 per cent planned for 2009.

Article keywords:

---

More industry news

• Think tank warns UK may have already slipped back into recession
• Growing demand for HR staff in technology and international sectors
• Boosting business growth a ‘priority’ to avoid Eurozone slowdown
• HMRC launches alternative disputes pilot scheme this week
• December employment statistics disregard gloomy recruitment predictions
• Eurozone manufacturing PMI shows modest improvement
• UK scores highly for economic governance by ratings agency
• Government launches two-year project focusing on manufacturing sector
• Burden of regulation on UK businesses ‘too high’

Back to news home page »