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Tax doesn't have to be taxing for small businesses |
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It is estimated that there are over 3 million small businesses operating in the UK. These owner-managed businesses (OMBs) face many challenges in the next 12 months. But tax doesn’t have to be taxing for small businesses, says the Chartered Institute of Taxation (CIOT). The consequences of the credit crunch are bound to impact on OMBs. The CIOT believes that small businesses that would not have had financial difficulties in normal circumstances should be allowed a breathing space to pay the tax they owe to HMRC. Peter Fanning, CIOT Chief Executive, says: “What we have seen in the last month has been quite exceptional. No small business, even in a worst case scenario, would have planned for such an event. There are various things that can be done to help businesses, such as wider publicity of HMRC’s ‘Time to Pay’ facilities, and allow them to pay the tax they owe at a time when they are able.” In these turbulent economic times, the CIOT believes it is even more important that the Government thinks very carefully about how it approaches the difficult issue of income shifting. The CIOT has long argued for a fundamental review of small business tax as this would help resolve many inconsistencies including reducing the effect of the shifting of income. Peter Fanning adds: “The CIOT welcomes the fact that both BERR and HMRC are looking at how they can help small businesses. Given that the original income shifting proposals were aimed at only on a tiny percentage of OMBs in the UK but would impact on a large proportion of them, the administrative burden would far outweigh the limited tax take.” The CIOT welcomes the opportunity to work with HMRC in developing a tax base that satisfies both the taxpayer and the tax administrator.
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About The Author  Sarah Laing Sarah is a Chartered Tax Adviser. She has been writing professionally since joining CCH Editions in 1998 as a Senior Technical Editor, contributing to a range of highly regarded publications including the British Tax Reporter, Taxes - The Weekly Tax News, the Red & Green legislation volumes, Hardman's, International Tax Agreements and many others. She became Publishing Manager for the tax and accounting portfolio in 2001 and later went on to help run CCH Seminars (including ABG Courses and Conferences). Sarah originally worked for the Inland Revenue in Newbury and Swindon Tax Offices, before moving out into practice in 1991. She has worked for both small and Big 5 firms. She now works as a freelance author providing technical writing services for the tax and accountancy profession. |
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Article Added Wednesday, 19 November 2008 |
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