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17/01/2011
Simple Tax Laws 'Would Pay Off'
Some small business owners are so frustrated with the complexity of the UK tax system that they would pay more just to see it simplified, new research has found.
Well over half (57%) of business owners surveyed by the Forum of Private Business said they would be willing to pay more tax in exchange for a simplified system - providing the system led to greater rewards.
Meanwhile, 50% said they would be prepared to pay more under a simplified system if that system cut down on tax avoidance among their competitors. Tax avoidance is typically carried out by bigger businesses with the resources to exploit geographic loopholes.
And 45% of business owners on the Forum’s Tax and Budget member panel said they would tolerate a higher tax bill under a simplified system if it was accompanied by a general reduction in legislative red tape.
The findings come after the Coalition Government announced the creation of the Office for Tax Simplification last summer. The Office is a Treasury department which is currently working on tax simplification proposals ahead of the March budget.
Forum Chief Executive Phil Orford said: “The cost of complying with Britain’s hugely complex tax system is such that, if simplification and profitability result, most businesses believe a little more tax would be a price worth paying.
“Clearly, if the Government is serious about stimulating small business growth, streamlining tax administration must be a priority.
“How can the Government continue to allow major retailers to set up shop in the Channel Islands to deliberately undercut small shops and internet businesses by exploiting a VAT loophole that clearly distorts competition and leads to tax abuse?”
Mr Orford added: “We desperately need reforms that incentivise small business growth by freeing up time and money to invest in future planning and expansion, rather than a system that impedes it, as the present one does.”
The Forum plans to investigate the possibility of a radical overhaul to the tax system.
This could include the abolition of business tax reliefs and allowances if corporation tax were to be cut to internationally-competitive rates and employment taxes (particularly employers’ National Insurance Contributions) were significantly reduced or abolished.
The Forum will also continue lobbying against tax avoidance schemes exploited by bigger businesses, such as the Low Value Consignment Relief loophole for goods mailed from the Channel Islands.
(BMcN/GK)
Well over half (57%) of business owners surveyed by the Forum of Private Business said they would be willing to pay more tax in exchange for a simplified system - providing the system led to greater rewards.
Meanwhile, 50% said they would be prepared to pay more under a simplified system if that system cut down on tax avoidance among their competitors. Tax avoidance is typically carried out by bigger businesses with the resources to exploit geographic loopholes.
And 45% of business owners on the Forum’s Tax and Budget member panel said they would tolerate a higher tax bill under a simplified system if it was accompanied by a general reduction in legislative red tape.
The findings come after the Coalition Government announced the creation of the Office for Tax Simplification last summer. The Office is a Treasury department which is currently working on tax simplification proposals ahead of the March budget.
Forum Chief Executive Phil Orford said: “The cost of complying with Britain’s hugely complex tax system is such that, if simplification and profitability result, most businesses believe a little more tax would be a price worth paying.
“Clearly, if the Government is serious about stimulating small business growth, streamlining tax administration must be a priority.
“How can the Government continue to allow major retailers to set up shop in the Channel Islands to deliberately undercut small shops and internet businesses by exploiting a VAT loophole that clearly distorts competition and leads to tax abuse?”
Mr Orford added: “We desperately need reforms that incentivise small business growth by freeing up time and money to invest in future planning and expansion, rather than a system that impedes it, as the present one does.”
The Forum plans to investigate the possibility of a radical overhaul to the tax system.
This could include the abolition of business tax reliefs and allowances if corporation tax were to be cut to internationally-competitive rates and employment taxes (particularly employers’ National Insurance Contributions) were significantly reduced or abolished.
The Forum will also continue lobbying against tax avoidance schemes exploited by bigger businesses, such as the Low Value Consignment Relief loophole for goods mailed from the Channel Islands.
(BMcN/GK)
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