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Insufferably complex tax system must be simplified say SMEs

Insufferably complex tax system must be simplified say SMEs

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.

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Image: A I C by kevindooley

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