Simplify Tax Says Forum

With just over a week until the budget, the Forum of Private Business is highlighting research  showing small businesses want a major re-think of taxation in the UK.

The Forum is calling for  measures to help small firms drive job creation and economic growth – including changing the existing £5,000 National Insurance holiday for the first ten employees recruited by start-ups to apply to the first two new staff taken on by all firms, handing private lenders tax breaks to boost available finance and drastic improvements in HM Revenue & Custom’s (HMRC) systems.

According to the research, while 54% of business owners feel the current deficit reduction programme is ‘about right’, 44% called for wholesale changes to the structure of the UK’s tax system, 24% want certain tax breaks removed to simplify the system and 15% would welcome a moratorium on tax changes.

A third (32%) of tax and budget panel members believe that HMRC could improve service levels by simplifying their communication methods and reducing bureaucracy. A total of 29% said better support at key steps in the business lifecycle would help them and 23% wanted reminders about imminent payment deadlines.

In all, 53% of respondents believe HMRC is doing a poor job in supporting them. A further 52% feel its tone of communication is poor; 45% that it is doing a poor job over targeting tax avoidance schemes; 33% criticised its lack of definitive answers to tax questions and 32% the lack of clarity in its communications.

Looking to the Budget, business owners prioritised reducing fuel taxes to ease costs; a VAT reduction for labour-intensive industries and removing barriers to employment, such as cutting employers’ National Insurance.

They also want less emphasis on measures devoted to short-term revenue-raising – including many of HMRC’s activities and business rates increases – encouragement for business investment to stimulate demand and better red tape reform.

“The Budget is a real opportunity to remove the growth barriers for small firms created by the complexity of the tax system. It is clearly one that should not be missed,” said the Forum’s Chief Executive, Phil Orford.

“In particular, our members want a level playing field on tax, and the UK’stax system to be conducive to business growth and success rather than a hurdle that is a struggle to overcome.

“It is also time to see genuine tax incentives to boost employment and investment in small businesses – including more encouragement for private lenders to compete with banks and stimulate funding for all firms.”



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