Taxman's expertise could fall short
The taxman's expertise in accounting will need to be strengthened if it is to deal with aligning tax profits with accounting profits for small businesses.
Richard Mannion, president of the Chartered Institute of Taxation, believes the proposal in the Budget, designed to cut the red tape burden for small businesses, will mean increased pressure on the skills of Inland Revenue officials.
‘The Revenue will need to beef up their accounts understanding and train inspectors like you train accountants – or increase the number of accountants in the department,’ said Mannion.
The proposals have attracted a great deal of attention since they were revealed in the Budget and are a key part of the government’s effort to reduce the administrative burden on small businesses.
The measures would cut out the intermediate step that requires small businesses to prepare financial statements which are then subjected to tax adjustments.
So far the proposals have been well supported, but it is becoming clear that, if enacted, they would place an added burden on the Revenue.
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