The Tories have commissioned Grant Thornton to conduct a major review of the
income tax, national insurance and VAT systems.
Shadow chancellor George Osborne said this week that the aim would be to
reduce the administrative burden on small businesses.
In a major speech to a London conference on flexible working organised by the
Chartered Institute for Personnel and Development and the British Chambers of
Commerce, he said: ‘I’d like to propose a new pact with Britain’s small
‘In return for them encouraging more flexible working and greater social
responsibility, the Conservative Party will reduce the burdens that small
businesses face. I am today setting out the radical package of tax
simplification that will form the basis of this new relationship between
government and small businesses.
‘First, I can announce that we are commissioning Grant Thornton, one of
Britain’s leading accountancy firms, to look at how we can greatly simplify the
administration of income tax and national insurance.
‘At the moment, income tax and national insurance are levied in different
ways and over different periods – and require two entirely different systems of
administration. Issues like this are causing needless complexity and
administrative difficulties, and have been the bain of small businesses for
‘Grant Thornton will be developing implementable proposals on how we can
align the basis of charge for employee national insurance contributions and
The Tories are also looking to reverse the increase in the tax rate for small
businesses and at ways of simplifying the VAT system, Osborne said.
With Gordon Brown set to take over as prime minister from Tony Blair on June
27 and appoint trade secretary Alistair Darling as his first
chancellor, Osborne’s speech is a bid to undermine the government’s economic
Brown’s Treasury deputy Stephen Timms said: ‘The Tories have announced they
are employing accountant Grant Thornton. These are the same accountants who
earlier this year found an £8.3bn black hole in the Tory tax and spend plans.
‘David Cameron and George Osborne are now promising the Tory right a wish
list of tax cuts – without any idea how to fund them. If they ever got the
chance to implement these uncosted, up-front tax pledges, the result would be a
return to boom and bust in our economy.’
Richard Le Tocq, head of Locate Guernsey, discusses the chancellor’s approach to high net worth individuals, and why relocation is increasingly attractive to HNWIs
MTD represents 'the single most significant change to the UK’s system of taxation in recent times', says Knill James partner Nick Rawson. So, how prepared are SMEs for digital tax reporting?
The firm says that the U-turn 'does not alter the need for a fundamental review of the way we tax work' and that the current tax system is in need of reform
Legislation on the NICs changes to be brought forward in the autumn following publication of 'the full effects of the changes to Class 2 and Class 4' in the summer