THE RECOMMENDATIONS IN the Office of Tax Simplification’s review on small businesses are “truly radical” but will not help small businesses in the short term, the UK’s leading accountancy firms have said.
John Whiting’s review recommended a merger of income tax and National Insurance and a simplified tax system for small businesses.
Alex Henderson, partner in PwC’s tax practice called the proposals “truly radical”. He added: “Such reforms would allow large amounts of legislation to be removed or simplified, but would inevitably cause disruption with winners and losers, so careful consultation would be needed. It is refreshing to see that the OTS has set such high ambitions, however.”
KPMG middle market tax partner David Bywater said the report tackles issues previously put into the “too difficult” pile, and makes brave recommendations. However, he added, “much of the review will take a long time” to be implemented.
“Therefore, while some very positive measures have been suggested, the wider proposed strategic changes to the tax system will not, in the short term, help small businesses currently struggling with their growth agendas,” he added.
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