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.”