Supporters of a complete review of tax laws for small business have been given ammunition by new research suggesting the ever-changing taxation system has had a detrimental effect on business.
The study found that more than 50% of respondents thought IR35 was a 'big problem'.
Conducted by Dr Alan Southern of the University of Liverpool management school and the Small Business Research Trust, the study supports calls for a complete review of how the taxation system is applied to small businesses.
Neil Hamper, head of taxation at the Federation of Small Businesses, said that a review was 'definitely in order'.
Last week, the Inland Revenue ruled out such a review, despite it being suggested in this year's Budget. The surprise u-turn outraged small business owners and accountants.
'The Revenue staff at grass-roots level loathe IR35. The government is once again tinkering at the edges of taxation, and small businesses are once again suffering as a result.'
Ian Durrant, director of external affairs at the Professional Contractors Group, said that most of the PCG’s members who deal with IR35 actually fall outside IR35 but have to jump through several hoops to prove this to the Revenue.
Around three out of five respondents said that the 19% tax on distributed profits would be a problem, supporting calls for the zero rate of corporation tax to be abolished.
Full Article:Financial Director