Simplify tax system, urge SMEs

Tax return form

Filling out tax returns can be nightmarish for SMEs

An overcomplicated tax system is a major bugbear for small businesses, according to a survey.

More than seven in 10 (71.7%) small- to medium-business owners polled by software company Sage said that they found it unreasonably difficult to understand and fulfill their tax obligations. An even greater proportion (76.3%) said the complexity of tax regulations meant they felt they were missing out on tax breaks.

Given the chance to make a single change to the tax system, 34.5% of entrepreneurs would make it simpler, while 25.9% would freeze VAT at 17.5%. Only 5.8% wanted to see the top, 50p rate of income tax scrapped.

Carly Flanagan, who runs Wedding Invitation Boutique, finds the present system infuriating. "I'd be persuaded to vote for a party that committed to rewriting the HMRC website and documentation so real people can understand it," she says.

If the system and documentation were clear and self-explanatory then I think far more small businesses would have success claiming the tax relief they are entitled to

Carly Flanagan, Wedding Invitation Boutique

"I'm an intelligent human being with a degree and yet I dread sitting down to do my tax return each year, anticipating the many hours of squinting at the computer screen trying to make sense of the tax-related jargon and living in fear of making a mistake which could result in a costly fine from the tax inspectors.

"If the system and documentation were clear and self-explanatory then I think far more small businesses would have success claiming the tax relief they are entitled to."

Andrew Hubbard, a tax specialist at accountancy firm RSM Tenon, says that well meaning changes have only made the problem worse: “Fundamentally, business owners want to be left alone. Often a change is introduced to make things simpler but ends up creating more cost and problems.”

 

2 comments about this article

comment by Pafmoxloolley
I apologise, but, in my opinion, you are mistaken. Write to me in PM. <a href="http://www.forum.sc-moguntia.de/memberlist.php?mode=viewprofile&u=58350" rel="nofollow">http://www.forum.sc-moguntia.de/memberlist.php?mode=viewprofile&u=58350</a> <a href="http://idea13.org/forum/member.php?u=186817" rel="nofollow">http://idea13.org/forum/member.php?u=186817</a> <a href="http://6044580.ru/memberlist.php?mode=viewprofile&u=6494" rel="nofollow">http://6044580.ru/memberlist.php?mode=viewprofile&u=6494</a> <a href="http://dle.e-sakha.ru/user/GedSuiffSeigo/" rel="nofollow">http://dle.e-sakha.ru/user/GedSuiffSeigo/</a> <a href="http://questlead.org/forum/memberlist.php?mode=viewprofile&u=9858" rel="nofollow">http://questlead.org/forum/memberlist.php?mode=viewprofile&u=9858</a>
comment by M. Smith
This move will actually benefit contractors (I know this esp since I am one :P) Yesterday’s Queen’s Speech, made at the state opening of parliament, contained hints that tax reform is high on the coalition’s agenda over the next 18 months. Freelancing tax complications The Lib-Con government intends to set up an independent Office of Tax Simplification and specifically stated that personal income tax allowances would be increased significantly. The longer-term aim is to have these increased to £10,000 which was one of the goals laid down by Nick Clegg and his Liberal Democrat party. Read all about it here : http://www.freelancesupermarket.com/news/2010/5/26/tax-simplication-good-news-for-contractors.aspx

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