Small businesses operating in the UK are finding the tax system insufferably complex, according to the Chartered Institute of Taxation.

The CIoT expressed its view after the results of a FPB survey revealed that 57% of SMEs would accept paying more tax if the system was simplified and red tape reduced. 78% of the respondents to the survey said the current tax system deterred them from recruiting new staff.

A fellow at the CIoT, Andrew Gotch, remarked that over the past 13 years the tax system has become increasingly more complex and small businessmen have been finding this increasingly troublesome to the point where it has now become almost insufferable.

However, he warned that it is a case of “be careful what you wish for” when it comes to tax simplification. It’s easy to simplify things but the government is desperate for money so it is unlikely that simplifying the system will mean paying more tax becomes cost-effective.

Contractor accountants might be interested to learn that the UK’s professional tax bodies have produced guidance notes for direct tax advisers to help them act in difficult situations.

The guidance is half the length of the 2004 code of conduct and is meant to be easier to use. It outlines the standards members should follow when dealing with the Revenue in connection with the tax affairs of their clients. The core principles include due care, integrity and professional competence.

There is new information on the regulations concerning money laundering and tax advisers are provided with flowcharts to help them cope with difficult situations, such as a client’s refusal to correct serious errors in his tax return. It also provides information on client confidentiality and the circumstances in which data must be provided to HMRC without the consent of a client.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: A I C by kevindooley

The Forum of Private Businesses is opposed to the plans of a number of councils to introduce a tax on companies that provide parking for employees.

A workplace parking levy was given the go-ahead in Nottingham last year and at that time the FPB expressed concerns that this scheme would be introduced by other towns. It seems that this will now become a reality. A spokesman for the FPB, Chris Gorman, says the WPL is a stealth tax which small businesses and contractor accountants will struggle to pay.

If an employer has more than 10 staff parking spaces they will face an annual charge of up to £250 for each space and this could increase to £350 in two years. Companies have the option of whether or not to pass the charge to the employees.

The labour government introduced the scheme a year ago but it was hoped that the coalition would abandon it. However, councils such as Bristol, Leeds and York are now actively giving it consideration. In London, Cambridge, Milton Keynes and Oxford councils are examining the idea.

The workplace parking levy is meant to discourage motorists from driving into towns and encourage them to make use of public transport to ease city centre congestion but opponents of the scheme fear councils will simply use it as an alternative revenue making measure in the face of the government’s austerity drive.

It is thought that the WPL will be both easier and cheaper to collect than city congestion charges as it will not affect shoppers and motorists who are not driving into cities for work.

Nottingham council is still hoping to push ahead with its planned scheme, after a five day public examination which will start on October 1st, and if approved it will come into force later this year at a rate of £185 per employee parking space.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Wheelchair Only by JoshuaDavisPhotography

The FPB has expressed its approval of the business friendly emergency budget, saying that it contained various key victories for small businesses such as smaller contractor accountants.

The 1% reduction in small companies’ tax was a positive measure, as was the £5 million threshold for relief on capital gains tax (CGT) for entrepreneurs and limited company contractors.

The Forum thinks that the government demonstrated its appreciation of the issues relating to small businesses by extending the Enterprise Finance Guarantee scheme, continuing the tax breaks for holiday let properties and abolishing back-dated business rates.

The full budget document pledged to review recruitment and employment law and this was something the FPB had called on them to do. Forum members often cite employment regulations as a major area of concern so any measures to simply the law will be welcomed.

Phil Orford, the FPB chief executive, believes owners of small businesses would have been pleasantly surprised by the budget.

On the subject of the impending VAT rise, Orford said that although this will have an impact, he thinks the majority of Forum members would rather this outcome than an increase in other taxes or a further reduction in public spending.

The FPB will now be calling on the government to give a guarantee that it will provide genuine private sector input to help boost local economic growth, especially in those areas that will suffer from public sector job cuts.

© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.

Image: Let it grow by James Jordan