The NAO is urging HM Revenue & Customs to introduce a single online registration for all business taxes, with a unique identifier for each taxpayer and a single one-stop helpline to improve compliance by new businesses.

The longer-term proposals are contained in a report urging the tax authorities to better target help and advice for new businesses and enlist the support of tax agents, other financial organisations and the Small Business Service.

It also calls on the department to simplify forms and produce guidance using plain English. It singled out the VAT registration form for particular criticism as being 'more difficult to complete' and complaining guidance that 'is complex, contains long sentences and a lot of acronyms and uses technical terms' and requires a reading age of 16 or 17, which is above the level of five million citizens.

Comptroller and auditor general Sir John Bourn said his recommendations 'will help HM Revenue & Customs in further improving the ability of new businesses to deal with their tax affairs.'

He said: 'Introducing a unique tax identifier would require substantial resources but could also result in substantial benefits, enabling HMRC to view the entire tax affairs of individual businesses and achieve a better understanding of the needs of different groups of taxpayers.'

About 700,000 new businesses start up each year, which are required by HMRC to register separately; completing complex forms for income tax or corporation tax, PAYE and VAT. It means 1.2 million new tax applications a year.

The NAO said: 'The requirement to register separately for each tax can duplicate effort for businesses - and the department - in providing and processing the same information each time.

'The department could reduce the burdens on businesses by unifying the common elements of registering for different taxes, and by expanding the facility to register online.'

It added: 'The experience of tax authorities overseas suggests that a unique reference number for all taxes would involve significant costs and take several years to introduce. But it would bring benefits to businesses and enable the department to link data on taxpayers across its separate computer systems; thereby achieving more efficient processes and improving the service provided to businesses.'