WE SHOULD BE thankful that at least the smallest businesses – and their advisers – will be spared dealing with real-time PAYE at its most onerous for another couple of years, following the extended easement of the RTI regime until April 2016.
Whether we should be thankful to the government for this easement, well, I think it’s more about being grateful for the endeavours and diplomatic skills of a select few tax and business representatives that helped persuade that the extension was a necessity.
Of course, it might have been something to do with the wide-ranging survey undertaken on HMRC’s behalf, which showed thousands of small business and advisers bemoaning the impact of RTI upon them: at best, its impact was neutral, often it had been a pain in the behind.
So three years after the gaining of power by the coalition government, a ‘business friendly’ government, we breathe a sigh of relief that more red tape has been fended off – for the time being. What began with the promise of tax certainty and less red tape, which included the introduction of the Office of Tax Simplification, has proved to be empty.
The office has tinkered around the edges of the tax regime, with its goal of merging income tax and NI too risky politically for this government (as with the many previous incumbents). In fairness, the government’s tax tinkering at least saves the tax tomes being completely re-written every year. Yet these tomes are still getting longer, not shorter.
The government’s stance on dealing with tax avoidance seems incoherent, with tax arbitrage a key plank of its policy on actually encouraging corporates” investment juxtaposed with grand proclamations made against business and the tax community.
Cash accounting has been threatened by the Department of Business, a move that looks like removing red tape but would merely create change and, therefore, confusion.
National insurance and business rate reliefs are welcome, but there’s no great giveaway. More needed to be done to encourage big business to spend all that loose change rattling around in their pockets.
Could things be worse? Yes, but the SMEs struggling with RTI deserve more. For a government that was committed to easing red tape it has effectively failed, in one fell swoop – with adviers often left to pick up the unbillable pieces.
Kevin Reed is editor of both Accountancy Age and Financial Director
Phillip Gershuny, senior tax partner at Hogan Lovells, outlines how a European exit could affect UK taxes
Brexit could hit UK GDP by as much as 3% by 2020, the international economic body has claimed
London accountancy firm Blick Rothenberg warns of potential damages VAT changes could cause UK businesses
Smith & Williamson announce appointment of former EY worker John Cooney as partner, ten years after leaving the firm