Tax simplification measures proposed for small UK business

The UK Office of Tax Simplification has published its interim small business tax review. It finds that simplification can only be achieved through major structural reform of the UK taxation system. It identifies 2 key areas that need attention:

  1. The integration of income tax and national insurance contributions
  2. Introducing a radical new approach to taxation for the very smallest unincorporated businesses.

It also makes provisional recommendations for other changes which could be introduced in a shorter time frame:

  • Improving elements of HMRC administration
  • Choice of legal form
  • Simplifying reporting requirements on reimbursed expenses and benefits for employees
  • Improvements to the capital allowances regime
  • Considering a simpler VAT system for small businesses that undertake international activities

 

You can download the full report from the HM Treasury website here.

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