High-level advisory groups involved in consultation with the government are
overlooking the difficulties facing small business in favour of servicing the
top end of town.
Growing conjecture over the Treasury’s inability to articulate a long term
tax strategy to SMEs is forcing many to reconsider the role of advisory groups.
According to Andrew Green, tax partner at
Bentley Jennison, the need for certainty is highlighted by the fact
businesses in the SME sector have been subject to tax changes, including those
made to capital gains, with limited consultation. ‘We’re in hard times. More
certainty needs to be given to SMEs, not the big guys,’ he said.
Green believes attracting the ‘right mix of people’ to advisory boards in
pushing SME concerns higher up the agenda will provide the sector with greater
‘Too much policy making is being made at the top end for big business and not
for SMEs. They’ve got more clout,’ he said.
Chaz Roy-Chowdhury, head of taxation at ACCA, said small business has had a
roller-coaster ride with the number of changes consulted on and legislated.
He said it is important these businesses feel comfortable with the direction
of the sector.
Specific and meaningful consultation between large and small business, the
Treasury and academics will assist in the provision of the certainty needed by
Chancellor Alistair Darling last week announced a range of measures designed
to help steer a small business through such a period of economic downturn. Along
with Lord Mandelson, the new business secretary, Darling has stepped up calls
urging banks to increase funding to parts of the SME sector.
Similarly, the Federation of Small Businesses is pressing the government to
inject £1bn as a survival fund.
It is estimated 40 of the seven million small businesses fold every day as a
result of lack of finance.
The government is currently consulting with big business over changes to foreign
profits rules, but the meetings are being kept under tight control by the
A discussion of the issues on the table last week including a possible
global debt cap, as well as tighter controlled foreign companies rules was
held under conditions of strict secrecy, with delegates declining to comment on
the direction of the discussions.
But rumours about the government’s plans have led some companies to move
their headquarters abroad to avoid the likely tax hit.
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