Autumn Statement 2015: Tax reform under the spotlight 

Business owners and advisers have called upon the government to shake up taxes ahead of the Autumn Statement.

Celia Francis, CEO of Rated People, which provides reviews for tradespeople, says it is time for government to press ahead with much-needed reforms to the tax and employment system. ‘Existing laws are too complex meaning many SMEs and sole traders are dissuaded from hiring a second employee – a vital ingredient for any business to grow and develop,’ she says.

Jane Mackay, partner at law firm Crowe Clark Whitehill agrees, saying that smaller businesses feel they are disproportionately contributing to the exchequer because they cannot afford the time or professional fees to undertake tax planning.

‘In addition, statistics indicate that HMRC is increasingly charging them penalties on their tax mistakes by arguing they are ‘deliberate’.’

Mackay says that, in order to support the UK’s vibrant SMEs, there should be introduced a formal de minimis amount of underpaid tax where no penalty is charged if HMRC discovers it on (and provided the tax is paid within an agreed time).

‘[This is also] to allow smaller businesses to voluntarily report mistakes to HMRC without a concern that they will be clobbered for penalties,’ she adds. 

Vince McLoughlin, partner at Russell New, a firm of business, tax, and charity advisers, says the Chancellor should have a change of heart on the new dividend tax, which he believes is going to hurt thousands of small and micro-businesses across the UK.

‘The costs for small businesses, which include pension auto-enrolment and the new Living Wage for the over-25s, already provide various financial hurdles for them to overcome.

‘The government has often banged the SME drum claiming that they are part of its five-year plan. However, with millions of small and micro businesses across the UK the impact of the dividend tax will send shockwaves throughout the business community and it is inevitable that doors will close.’

McLoughlin adds that this is also the perfect opportunity to announce plans to align income tax with national insurance.

‘This is simply another levy of tax and that’s exactly where it should kept – with tax. The key desired outcome from the Autumn Statement is that the current economic confidence continues to be built upon so businesses can carry on building their workforce and investing in growth.’

Peter Burgess, director at Retail Human Resources says the Chancellor must immediately raise the rate at which both employee and employer National Insurance payments are made, to encourage workers and employers to work more hours.

‘Many zero hours contracts are kept to a level that avoids the payment of Employer’s NI,’ he says.

Alistair Bingle, managing director at removal company Bishop’s Move, calls for a 3 per cent cut in fuel duty.

‘A fuel duty price cut would stimulate consumer spending and business investment and re-ignited economic growth across the UK. Fuel duty cuts have a history of creating more jobs.

‘However, by increasing tax on fuel duty then this will add millions in extra costs to families and businesses across the country having a detrimental impact on the haulage industry and damage job creation levels over the course of the next year.’

Further reading on tax

Ben Lobel

Ben Lobel

Ben Lobel was the editor of from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

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