The ICAEW has responded positively to some of the business tax reforms outlined in the chancellor's speech, but has warned the taxation system is still too complex and onerous for small businesses and the self employed.
Frank Haskew, from the institute’s tax faculty, said: ‘In spite of the events of 11 September contributing to a global economic downturn, we are pleased to see that the chancellor is pushing forward his enterprise agenda as announced in June.’
Haskew said the reforms to corporation tax and to the capital gains tax regime were welcome, but said the moves did not remove red tape for the self employed.
‘We welcome the expansion in the corporation tax 10% band which means that smaller companies will have more money to plough back into their business. Unfortunately this does little to help the self-employed, who have been left behind by most of the other tax reliefs, such as research & development tax credits, enterprise management incentives or the enterprise investment scheme.’
Haskew said the measure fell short of Labour promises to lift burdens facing the SME sector.
‘Despite some welcome reforms, this still leaves a complex tax system that small businesses struggle to operate. It is disappointing to see that there appears to be no further progress in the government’s “radical simplification” of small business taxation, which was proposed in the Budget. The chancellor needs to push these reforms forward to allow the entrepreneur the chance to get back to running the business rather than the tax system.’