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FSB slams continuing uncertainty in small business taxation

16 May 2007

The Federation of Small Businesses (FSB) today criticised the continuing complexity of the tax system following the 2007 Budget, which included the latest in a long line of major changes to small business taxation since 1997.

In evidence today to a House of Lords Committee that is examining the tax implications of the Finance Bill in terms of clarity and simplicity, the FSB said that the latest Budget will increase costs on small businesses and make the tax system more complex.

The FSB told the committee that tax legislation needs to be clear and specific, properly evaluated prior to implementation to avoid unintended consequences and easy for employers to comply with and administer.

Mike Cherry, FSB Financial Affairs Chairman, said:

“Small businesses consistently tell us that a stable and simple tax system would allow them to create more jobs and stronger local economies. In the past decade we’ve had stability in terms of the politicians in charge of the tax system. Why can’t we have stability in the tax system itself?

“Among the changes in the past few years were tax incentives for small firms to incorporate, followed soon after by tax incentives for small firms to unincorporate – a costly and complicated procedure and a bizarre process for the government to expect small businesses to go through.

“The Chancellor claimed in his Budget speech that small businesses would be compensated for the tax increase for small companies from 19 to 22 percent with an expansion of capital allowances, research and development funding and more help with training staff. But some small businesses will not qualify for these complicated benefits and many are not even aware of their existence.”



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Federation of Small Businesses

Federation of Small Businesses

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