HMRC intends to improve its relations with the tax agent community, a move which could bring benefits to contractor accountants.

The department has drawn up a list of proposals which include understanding the tax system from the perspective of an agent and providing additional security against fraud by enrolling agents on a database.

HMRC spokesman, Brian Radford, pointed out that tax agents had a vital role to play in delivering the tax system and the Revenue would be unable to function without them. HMRC wants to improve its service to take account of the changing needs of its customers and make administration more consistent and efficient.

He concluded by saying the department had been working closely with agent representative bodies because they also want to help taxpayers meet their tax obligations effectively and efficiently.

The Chartered Institute of Taxation has welcomed the move. The president of the Institute, Anthony Thomas, said agents are likely to welcome the proposed self-serve facility so that they can access some of HMRC’s system. Agents get frustrated at the time wasted waiting for the Revenue to do its job, correcting errors and routinely chasing progress. If the self-serve facility is implemented effectively, it could save agents, HMRC and taxpayers both time and money.

Thomas did express concerns that the database enrolment should be overseen by an independent body and the system must not become bogged down with excessive bureaucracy. It’s important to remember that tax advisers are agents to their clients and not the Revenue.

HMRC’s proposals are now at the consultation stage and the Revenue intends to run a series of meetings and workshops with agents to find out their views.

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Since the coalition launched its Red Tape Challenge website, more than 6,000 responses have been received, according to government data.

Businesses and limited company contractors have been invited to submit their comments on current and forthcoming legislation to give the government an opportunity to adapt the regulations before they are implemented.

A lot of the published statements have called for changes in the retail environment and industry sector champion, Dr Kevin Hawkins, urges consumers, suppliers and trade associations to visit the site and express their concerns and solutions. He described the Red Tape Challenge website as a chance “too good to miss”.

He went on to say that this is the first time the government has given those at the sharp end of complex regulation the chance to be heard. This is a golden opportunity for business owners to tell politicians about the bureaucracy that wastes time and money and suggest ways to improve things for both themselves and their customers.

The business secretary, Vince Cable, says that unless ministers can come up with strong reasons why an item of unpopular regulation should remain, government departments will scrap it.

Amongst other legislation up for debate, the website contains 278 environment regulations, 264 concerning pensions and 151 that cover employment law.

The portal has already received concerns over the Care Quality Commission agency and health and safety guidance.

One man wrote that the CQC does not understand that dentists operate small businesses and do not have the staff to spend hours filling in forms and undertaking compliance audits. He went on to point out that too much reliance is put on box ticking exercises and the government doesn’t seem to appreciate that professional staff are regulated and are committed to providing the highest possible standards.

The owner of a small construction company recommended a rethink over the work time allowable for the use of steps and ladders.

However, not everybody is happy about this new government initiative. One lady asked why the public was being asked to contribute their views when MPs are paid to sort out these problems.

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UK contractors will be pleased to learn that the government has committed to overhauling the process by which SMEs compete for public sector contracts.

This will be achieved by cutting bureaucracy and becoming more open and transparent in its dealings.

The national chairman of the FSB, John Walker, says this is a victory for small businesses in the UK. The FSB has been campaigning for SMEs to have the same opportunities to public sector contracts as large organisations do. The new measures to get rid of red tape and open up transparent communications channels, which were outlined on Monday, are most welcome, he said.

There also needs to be a genuine change in culture within government procurement when it comes to dealing with SMEs, Walker added.

According to the Federation’s statistics, 70% of smaller businesses rarely bid for public sector contracts because of lack of awareness.

The situation is so bad that the UK ranks 24th out of 27 member EU states as far as access to public procurement markets goes. Only 24% of public sector contracts are awarded to small businesses in the UK, compared to 44% in France.

The REC has also been campaigning for a change in procurement practices for several years. Kevin Green, the chief executive of the REC, said that at last we are seeing action instead of mere words. The REC wants to see a competitive, dynamic market where recruiters can compete based on their capabilities and competences. He added that the REC will monitor the implementation of the new measures and will continue its constructive work with the Cabinet Office and OGC.

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SMEs could find that trading overseas is the best way to survive the economic downturn, according to Mark Prisk, the enterprise minister.

In order to create a truly global business, firms who already trade abroad should offer help and advice to limited company contractors looking to do similarly. International advisers on trade should then work together and ministers should engage with their counterparts abroad to build economic relationships.

The Nat West / RBS banking group says that the UK could see a boom in exports but that will only happen if businesses get the requisite help. 69% of firms believe the time is right to increase their overseas trading but they cannot get the help they need to do so. Two-thirds of companies want to see more help from the banks and 58% say they would have more confidence to export if they received advice from overseas trade experts.

Nat West / RBS is now offering free training courses to advise firms on the best way to manage risk when venturing into overseas trading markets.

A separate survey from telecoms company O2 found that 40% of companies plan to trade overseas next year and over a third of them say overseas economies are becoming more welcoming towards small businesses. Out of the top 10 export markets of choice, six are outside Europe, with the most popular being the U.S.

Another problem facing small businesses is the excessive bureaucracy that comes with exporting goods and services. According to a recent report from the FSB, 25% of UK businesses already export but nearly a third of them say that excessive red tape is stifling their efforts, whilst 48% say they find fluctuations in currency to be a major obstacle.

The chairman of the FSB, Mike Cherry, said that the manufacturing and defence sectors offer big export opportunities for small businesses but in order to be successful they need to know how to access available support. The Federation has called on the government to be more pro-active when it comes to promoting assistance and also to launch a campaign that highlights the advantages of the Services Directive.

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Basic administrative tasks relating to bookkeeping, invoicing and billing and filling out timesheets take the average worker in the UK 37 days every year, according to Keboko, the cloud service provider.

The cost of all this red tape amounts to more than £100 billion and could encourage freelancers to get help from a contractor accountant in a bid to reduce the amount of time they spend carrying out administrative duties.

Charlie Cowan, the CEO of Keboko, commented that companies should be trying to rebuild after the recession but instead many workers are finding it hard to do this as they are bogged down with tasks such as data input and updating reports. UK businesses are basically throwing the money spent on these tasks down the drain.

The burden of dealing with the taxman is also costing businesses dear, the IoD reported earlier this week. The Institute surveyed its members and discovered that there is still considerable room for reform to reduce the administrative burden surrounding taxes. The survey also discovered that 30% of businessmen would actually advise someone not to start up their own business because of the weight of the tax burden.

An overwhelming number of directors want to see the regulations concerning PAYE and National Insurance simplified. Business people sometimes struggle to understand the tax rules and have difficulty finding out the correct information when they contact HMRC. Only 15% of respondents said it was easy to get the right information when they called the HMRC helpline while a third said it was very or fairly difficult.

HMRC’s website does not fair any better either. 16% said they could find the information they needed easily but again 33% struggled to find what they needed to know.

Since the PAYE coding errors earlier this year, businesses have found it increasingly difficult to get through to the Revenue’s helpline. 37% of the directors who did manage it feel that the majority of HMRC officials have a poor understanding of the nature of their business.

Half of the directors surveyed said they want the OTS to simplify the PAYE and NI system and 28% said the taxation of employee benefits was the area most in need of simplification.

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The waiting is over and Ed Milliband just managed to win the Labour leadership battle against his brother David.

The FSB is urging Milliband not to forget that small businesses and freelancers are essential to the UK’s continued economic recovery. A survey of 4,000 of the Federation’s members found that 75% of them want to see a simplified tax system in the UK whilst 33% are concerned that the growth of their business is hindered by too much red tape.

The National Chairman of the FSB, John Walker, wants to remind Mr Milliband that SMEs are the largest employer in the UK and as such are vital if the UK is going to continue along the road to economic recovery.

One of the problems that all the party leaders have to tackle is the current crisis within our banking system. There is a lack of competition amongst the high street banks and this has led to the banks lending less. Figures from the Bank of England showed that the crisis surrounding small business lending still exists and companies that have received funding are paying high interest rates on their loans.

Last Monday, Vince Cable stressed that the banks must do more but will they listen? At the moment nearly 500 SMEs collapse every week and yet the banks do have the money to lend.

In the 12 months from July 2009, the banks received £47 billion more in loan repayments than they advanced in new loans. This shows that the larger organisations are repaying their loans but the banks are reluctant to hand out new loans. If we are to avoid a double dip recession, this trend has to change, and quickly. But is the current government strong enough to force the banks into submission?

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The Audit Commission is to be scrapped, Eric Pickles, the communities minister, announced last Friday.

The commission employs about 2,000 people to monitor the performance and accounts of public sector bodies. The government claims that shutting it down will save around £50m a year.

This move is likely to benefit the private sector as councils and other public sector bodies will be able to tap into the open market and appoint their own external auditors. By outsourcing audit expertise, the government hopes to cut back on the centrally imposed bureaucracy and costly auditing, thus saving money for council tax payers.

The National Audit Office is to set up a new auditing framework to ensure public sector bodies are still subjected to robust auditing.

Pickles said that the Audit Commission is no longer a watchdog looking after the interests of the taxpayer; rather it has become a creature of Whitehall. This new plan goes together with proposals to create an army of local people who will hold local bodies to account when it comes to spending tax and delivering value for money services.

The Audit Commission, probably understandably, is less than optimistic that this new approach will work. Michael O’Higgins, the Commission’s chairman said the department had more than fulfilled its aims since it was set up by Michael Heseltine and the Tory government in 1983.

The ACCA believes the move will prove costly and lead to inconsistencies in local government reporting. The head of public sector at the ACCA, Gillian Fawcett, pointed out that although a lot of the Audit Commission’s work is currently contracted out; the commission ensures that reporting is consistent.

Whilst this move will undoubtedly benefit some private sector accountants and contractor accountants, the general feeling on the street is that the work will go to the larger accounting firms rather than smaller local businesses.

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SMEs and online accountants are spending a disproportionate amount of time on administration and tax compliance, according to the CIOT.

Andrew Hubbard, the Institute’s immediate past president, said that the new tax changes that occur every year have created a lot of anomalies in the system and it is now very unstable.

He believes that the government should create stability so that people setting up a small business know exactly which tax path they will be following for the next 5 years.

A recent survey carried out by specialist insurer found that 80% of SMEs and limited company contractors feel that the burden if taxation is their major worry.

Last week, George Osborne and David Gauke officially set up the OTS to look into the simplification of the current tax regime. Michael Jack will chair the new body and he already stated his view that entrepreneurs should never feel deterred because the tax system is too complex.

John Whiting from the CIOT will act as the interim tax director for the OTS and he reiterates Jack’s view saying that whilst it is probably impossible to have a truly simple taxation system, working towards a simpler one will help everybody.

Jack and Whiting will be helped by external tax and legal experts who will focus on individual complex areas and provide additional advice to the Office of Tax Simplification over the coming months.

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The Reducing Regulation Committee had its first meeting last week and contractor accountants are relieved that something is eventually being done to cut the red tape that has strangled enterprise over recent years.

Vince Cable, the business secretary, is heading the Committee which met for the first time on July 1st. Mark Prisk, the Small Business Minister, Francis Maude, the Cabinet Office Minister and Danny Alexander, the Chief Secretary to the Treasury, are also members of the Committee.

Mr Cable said that the government must give the balance of power back to individuals. Businesses such as online accountants are required to drive economic growth, not spend all their time filling in forms. The Committee wants to change Government culture away from regulation and find alternative ways of solving problems.

In future, all proposed regulations will have to be stress tested by the Committee and only those which are deemed high quality and priority will be allowed to proceed. There will also be a one-in, one-out system so that businesses will not be burdened by excessive regulations.

The first meeting coincided with the launch of a new government campaign called Your Freedom. Limited company contractors and individuals are invited to tell the government which of our current laws and regulations they would like to see abolished.

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According to the latest figures from Institute of Directors (IoD), SMEs in the UK are collectively spending as much as £80 billion on red tape and compliance.

The staggering statistics were revealed just as the IoD called on the government to formulate a new approach to measure exactly how much small businesses are spending on paperwork, forms, and limited company compliance.

With the general election only months away, many SMEs are now hoping for a culture change in the civil service. The department has historically been rewarded for introducing regulation on a volume basis rather than focusing on whether or not it truly adds value to the UK economy.

A spokesperson from the IoD described the amount of regulatory paperwork as “excessive” even for professional services such as solicitors, doctors and contractor accountants. According to the IoD, unless there is a fundamental change in the way civil servants are incentivised, UK SMEs will continue to struggle with excessive and often unnecessary paperwork than prevents them from growing their businesses and ultimately creating employment.

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