A SIMPLIFICATION OF the tax system for small businesses could result in less work for tax advisers but would be in their best interests overall, the head of the review team has said.
The Office of Tax Simplification’s report into small businesses said that SMEs are employing tax advisers to deal with unnecessary complexities in the system. It suggested a simpler system for businesses with turnovers of £20,000 or less. John Whiting, head of the team, told Accountancy Age that the VAT flat rate initiative has shown that it is possible to introduce simpler schemes for smaller businesses.
“For small businesses, let’s think of a simpler system that suits them, they will have to keep records, but minimal ones, it is dead easy tax system to understand and dead easy for HMRC to implement. That sounds appealing to me,” he said.
It would possibly mean less work for tax advisers, he added. But this will affect micro businesses, with turnover of less than £20,000, a large proportion of which do not have advisers.
“I can’t help but think that the work that would drop away would be the worst incomplete records, desperately trying to get some form of accounts from the brown paper bag of receipts.”
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