Tories to latch onto SME tax clampdown
Hugely controversial government plans to clamp down on the tax affairs of small companies will be used as a political battleground by the Tories.
Link: SMEs face tax ‘sledgehammer’ threat
Section 5.91 of the pre-Budget report stated the government ‘will bring forward specific proposals for action in Budget 2004, to ensure the right amount of tax is paid by owner managers of small incorporated businesses’.
Accountants fear another attack similar to IR35 and Section 660, which have already incensed small business owners.
Mark Prisk, financial secretary to the treasury wrote to paymaster general Dawn Primarolo on 19 December. If Primarolo had not replied by the end of this week he vowed to consult shadow chancellor Oliver Letwin before taking the subject ‘up the chain to the chancellor direct’.
‘We understand that [the government] will say nothing until the Budget,’ Prisk told AccountancyAge.com. ‘Now that’s wrong.’
It is the fear of the government not consulting that most worries accountants and small business owners. John Whiting, tax partner at PricewaterhouseCoopers, said there is ‘a strong element of the fear of the unknown’ over the government’s intentions.
He said that time was running out if the government was looking into meaningful consultation and that if it leaves it any longer it will merely be consultation over ‘dotting the I’s and crossing the T’s’
A spokesman for the Revenue said: ‘The government has identified problems and detailed options will be brought forward at Budget time.’
