Action over corporate tax is urgently needed to kick-start the SME sector due
to the lack of availabile credit, according to those caught up in the financial
Speaking at the CBI tax conference, Anne Duncan, chief executive of marine
development company YellowFin, said that, while SME’s are not seeking a separate
system of corporate tax, change is needed.
‘The one-stop shop strategy doesn’t work for innovation. Do SME’s require
different treatment? Most definitely,’ she said.
Duncan said corporate tax rates are too high and the increasing amount of
changes to the tax structure is an unnecessary burden to business.
A growing consensus shows the UK government needs to be more transparent in
consulting and implementing changes to the system, and Duncan said HM Revenue
& Customs needs to start working in partnership with business and not as an
‘A long term strategy would help. We don’t want any surprises,’ she said.
Judith Freedman, professor of taxation law at University of Oxford, said
while it’s not possible to design a system of corporate tax without considering
SME’s, a separate rate would create too many barriers.
‘SME’s have to be part of the initial design. It can’t be a case of get the
large firms sorted then deal with the small firms later,’ she said.
Despite concerns expressed by small business, Freedman said areas of PAYE and
VAT are higher compliance burdens to an SME. In addition, compliance with
employment law is seen as more cumbersome and costly than tax.
Chaz Roy-Chowdhury, head of taxation at ACCA, also said a lack of
transparency is hindering growth of small business and that a more flexible
approach is needed.
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The UK tax gap fell in 2014-15 to its lowest-ever level of 6.5%, revealed official statistics published today
Changes to the tax system is urged to support the growth of entrepreneurs, found a report from the Grant Thornton UK, the Institute of Directors, and the Prelude Group