ICAS: tax ‘simplification’ would complicate small company tax

ICAS: tax ‘simplification’ would complicate small company tax

Institute urges government to rethink tax reform proposals

Government proposals aimed at simplifying corporation tax calculations and
returns for smaller companies are likely to cause confusion and make accounts
more opaque, the Institute of Chartered Accountants of Scotland has warned.

A Treasury discussion document published in the pre-Budget Report last
November, which closed for responses last week, suggested that small companies
might base their statutory accounts on tax rules rather than generally accepted
accounting principles, or might be taxed by reference to cash flows rather than
profits.

ICAS has rejected the two options, arguing that they could complicate tax
returns simpler for small businesses, although possibly helping HM Revenue
& Customs, and would make company accounts less informative for others.

Donald Drysdale, assistant director of tax at ICAS, said: ‘Change in itself
can impose administrative burdens, while also causing uncertainty. Businesses,
especially small businesses, are facing commercial and financial uncertainties
as they try to survive through an exceptionally harsh recession. This is not the
time for Government to be overturning existing rules for the sake of it.’

ICAS has urged the government to abandon its plans and instead aim to
simplify tax compliance for all small businesses, whether incorporated or not,
ICAS said.

Applying the same measurement of taxable profits to companies and
unincorporated businesses would be an important step towards simplification,
ICAS added.

Further reading:

Treasury
‘simplification’ would complicate small company tax, says ICAS

Corporation
tax calculations and returns for smaller companies

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource