THE GOVERNMENT is “squandering” the chance to make tax simpler for SMEs in the upcoming Finance Bill 2013, according to the Association of Taxation Technicians.
The “cash basis for small businesses” clause – designed to allow small businesses to account on a cash basis instead of traditional accounting methods – has been “unnecessarily complicated” by HM Revenue & Customs, something the ATT says denies the companies access to reliefs.
The criteria businesses must satisfy to use the proposed provision are likely to mean very few take up the offer, the association warned. In turn, it said, the clause would then be a candidate for abolition due to the lack of use.
“There is nothing simple about what is currently on the table”, ATT president Yvette Nunn said. “The denial of sideways and early years’ loss relief will significantly limit the take-up of these proposals.
“It is hard to envisage any reasonably competent adviser recommending the simpler system if that might result in the denial of loss relief for their client.
“This is a good idea gone bad,” she went on. “Small firms regularly tell us that the burden of tax compliance is the bane of their lives. But HMRC has redesigned it by adding unnecessary complications, denying access to valuable reliefs and making it generally less appealing. There is nothing simple about what is currently on the table.”
Does Darwin's theory apply to taxation? Colin ponders...
The UK tax gap fell in 2014-15 to its lowest-ever level of 6.5%, revealed official statistics published today
Changes to the tax system is urged to support the growth of entrepreneurs, found a report from the Grant Thornton UK, the Institute of Directors, and the Prelude Group
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states