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FSB welcomes new OTS recommendations

The Federation of Small Businesses has come out swinging in support of new tax recommendations made by the Office of Tax Simplification.

Contractors, freelancers, accountancy experts, and pretty much anyone who runs their own business and has less than 10 employees do not have much in the way of nice things to say about the Government. This is due in no small part to how SMEs and sole traders are more or less put through the wringer – look at the new “supervision direction and control” SDC rules going into effect on 6 April if you want to kick over that particular beehive. However, sometimes the Government gets it right, or at least takes some steps in the right direction – and the FSB wants everyone to know that the OTS just took one of those baby steps.

Well, the FSB would have liked what it called a “broader approach” taken by the government entity, but the trade industry body isn’t discounting the fact that the OTS stepped up to the plate for small business owners. There’s simply a dire need to reduce administrative burden and simplify the tax system, FSB representatives said, and the organisation was mightily encouraged to see a recent OTS report recommend additional research into the development of a consolidated tax model for any company that employs 9 workers or less. Such a plan would allow turnover to be factored in as a basis for tax.

The OTS recommendations say that the current tax system, one that treats multinational mega-corporations the same as infinitely smaller companies, is simply “disproportionate.” The FSB is onboard, remarking that a more personalised and simplistic system needs to be implemented that focuses around each firm and each claim. Such an approach, which would be much more ‘tax-payer centric,’ would also be much more recognisant of how companies of different sizes can and cannot face compliance costs.

If the FSB was in charge, it would be implementing a single-payment solution for small firms that incorporated several separate taxes into one. This would potentially reduce tax complexity for small companies by a massive margin, the trade industry body said. With more people choosing self-employment – and with the taxation pitfalls that brings – these issues are growing increasingly important today, don’t you think?

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