Tax News

A survey carried out by the Federation of Small Businesses (FSB) of over 1600 firms has revealed that around 75 per cent of small businesses believe that they would be able to grow their business if the UK tax system was simplified.

Over a third (34 per cent) of respondents cited income tax as the most difficult issue to deal with, while 52 per cent reported that taxable allowances are the most complex to manage. VAT was considered to be the simplest tax to deal with by 52 per cent of repsondents.

A half of firms spend less than two hours a week fulfilling their tax responsibilities, but for 10 per cent of firms it occupies more than six hours of their time.

John Wright, the FSB's national chairman, said: "The government must recognise how important small businesses are to strengthening economic recovery.

"As our survey findings show, three in four would grow their business if the tax system was more simple to understand. The potential investment and jobs which could be created through such a move would provide the economy with the boost it needs to sustain recovery."

With a general election looming, the FSB called on the incoming administration to "think small first and get conditions right for entrepreneurs and small businesses to thrive".

New powers given under Finance Act 2009, s. 94 will come into force on 1 April 2010 and will allow HMRC to make public details of taxpayers and companies who deliberately evade taxes.

Stephen Timms, Financial Secretary to the Treasury, said:

“It is only right that people pay their fair share of tax, which supports vital public services. We know that law-abiding taxpayers will want to see the results of HMRC’s investigations into tax cheats.

“This new approach should make people think again about trying to get away with tax fraud. As well as having to pay the tax, interest on the tax, plus penalties of up to 100 per cent of the tax lost, they also now risk being identified publicly.

“We are only targeting deliberate tax evaders. So if you know that you have not paid the right tax, and you want to avoid being named, contact HMRC right away to set things straight.”

It is currently planned that names will be published on HMRC’s website. Because this measure will only be applied for periods starting from 1 April 2010, it is not expected that any names will be published before the first half of 2011.

Taxpayers who may be named are those who have deliberately evaded tax of more than £25,000 in total.

If taxpayers make a full disclosure of any tax wrongs without delay they can avoid having their name and details published.