Small businesses fight against digital tax proposals
29 February 2016
The proposals to simplify tax reporting by calculating only sales, payroll and interest costs to determine a company’s overall tax bill, have proved unpopular among small businesses. Government plans for digital record-keeping increase the need for simplified taxes that businesses can readily understand, according to the Federation of Small Businesses (FSB), the body which represents owner-managed businesses and the self-employed. It said that “simplification is necessary for the digitisation of tax to be effective for HM Revenue & Customs and meaningful for smaller businesses”.
HMRC claims the new regime would be “secure, light-touch and far less burdensome than the tax returns of today”. However, the FSB has joined forces with business groups and professional bodies in warning against a mandatory regime, with the Low Incomes Tax Reform Group stating that compelling small businesses to submit information digitally would make some involuntarily non-compliant.
The proposals have been submitted to an official review by the Office of Tax Simplification ahead of the March Budget.
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