Government to simplify corporate tax regime for small businesses
The Treasury has today responded to the Office of Tax Simplification’s (OTS) major new report, simplifying tax for smaller businesses.
Publishing its review of the UK tax regime for small businesses in May 2019, the OTS found that in some areas, tax is needlessly complicated and can pose a significant challenge for new business owners.
The report presented 10 key recommendations, as well as other suggestions for improving HM Revenue & Customs (HMRC) processes, relating to launching a business, PAYE, compliance, tax agent coordination, corporate tax reporting, and adapting tax to changes in the business landscape.
Commenting on the report in May, Bill Dodwell, OTS Tax Director, said: “Many new businesses are formed without sufficient help and guidance. This can lead to mistakes being made, resulting in substantial costs or penalties as their tax compliance affairs are put in order.
“We recommend that government offer better and more readily accessible guidance, joined-up across government and communicated through multiple channels, to help people starting small businesses.”
The review comes after the Chancellor of the Exchequer commissioned the report in July 2018.
Responding to the OTS this week, the Treasury has accepted five of the 10 major recommendations and suggestions, while committing to consider the remaining five.
The conceded recommendations include making strategic focus on the PAYE system an HMRC priority, appointing a senior official to oversee and prioritise implementation of the agent strategy and mapping major customer journeys for small businesses across tax regimes.
Accepting the recommendations, the Treasury said it was “committed to ensuring the UK remains an attractive environment for business and entrepreneurship”.
To access the OTS report, simplifying everyday tax for small businesses, please click here.
To see the Treasury’s response, click here.
For help and advice on setting up a small business and reporting tax, please get in touch with our expert team.