FSB claims 'hidden agenda' in tax incentives
The Federation of Small Businesses has embarked on a campaign to force the Inland Revenue to deal with self employed tax matters in the same way it does incorporated business.
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It follows the release of an FSB report that claims the self-employed pay up to 32 times more tax than incorporated businesses. In his April budget, Gordon Brown introduced a zero tax rate for the first £10,000 of a companies profits.
The lobby group claims there is a ‘hidden agenda’ in trying to get small companies to incorporate. Incorporated companies are easier to tax, but come with far more red tape than small businesses or partnerships.
‘The release of this report marks the start of a campaign,’ a spokesman for the FSB told Accountancy Age. ‘[Members] are all meeting with their constituency MPs to discuss it.’
Neil Hamper, head of the FSB’s Taxation Unit, said the chancellor is likely to remove the tax incentives, as soon as enough numbers have incorporated. ‘If our suspicions about a hidden agenda are correct there is a danger that once greater numbers incorporate there will no longer be a reason to retain this generous tax regime,’ he said.
A spokesman for the Revenue said it would not comment on speculation.
For a copy of the full report, go here.