ICAEW calls for simplified tax system
The ICAEW has called on the chancellor to 'reduce the burden on small businesses', in particular by 'seriously considering' merging the PAYE and NIC tax systems in his pre-Budget report.
The ICAEW has called on the chancellor to 'reduce the burden on small businesses', in particular by 'seriously considering' merging the PAYE and NIC tax systems in his pre-Budget report.
The institute cited red tape and an over complicated tax system as threats to the growth of enterprise and called on the government to review ‘pay as you earn’ and national insurance contributions tax systems.
Institute president Michael Groom said taxpayers deserved a simple and transparent regime.
‘So why not come clean and investigate ways to merge PAYE and NIC?,’ Groom asked of Brown.
‘Smaller businesses would benefit by not having to spend hours of their valuable time administering a payroll system that is mind-numbingly complex due to the rules regarding the different tax and NIC treatment of non-monetary items such as employee benefits,’ he added..
Groom said the current system acted as a ‘disincentive to SMEs to take on new staff.’
The ICAEW called on Gordon Brown to ‘take action’ to ensure SMEs can create new jobs.
And in another ‘enterprise’ plea, the institute’s tax faculty also called for the chancellor to create a level-playing field in respect of the tax treatment of incorporated companies and unincorporated businesses.
It said changes to capital gains tax rules should ensure business behaviour is not distorted for tax reasons. The tax faculty also welcomed ‘in principle’ the introduction of an R&D tax credit as a means of helping the UK stay competitive internationally.
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Pre-Budget spotlight on public sector