The Federation of Small Businesses (FSB) has published a submission to the Treasury which calls on Gordon Brown to grasp the opportunity presented by a major review of small business taxation – the details of which will be published at next week’s Pre Budget Report.
The submission calls for the review to adopt a fresh “bottom-up” approach to tax that recognises the differences between large and small businesses and delivers a simpler system for small firms.
Specifically Britain’s biggest business organisation is calling for a £10,000 small business allowance to rectify recent mistakes made in the taxation of small limited companies. The allowance would apply to all small firms irrespective of their legal status.
The FSB also argues that the review is an opportunity to overhaul VAT; to abolish IR35; to establish the principle that the state rather than employers pays benefits; and to re-introduce the 100% First Year Allowance for IT.
Neil Hamper, FSB Tax Chairman said:
“Whether this review is an opportunity or threat to the UK’s 4m small businesses currently hangs in the balance. It will come down to whether the Chancellor is prepared to engage in a real debate that addresses the underlying problems. “If he does then this is a great opportunity to deliver the simplification and stability that small businesses need. But there is a real danger of another knee jerk reaction and yet more tweaks that will lead to more confusion or at worst higher tax bills for Britain’s entrepreneurs.”
The FSB is also calling on the Chancellor to announce the Government’s response to three major reviews:
- On the Gershon review into public sector efficiency, the FSB is looking for assurances that any government drive towards cutting costs will not undermine moves to improve access to contracts for small businesses,
- On the Hampton Review into inspection and enforcement, the FSB is calling for the Government to introduce a generalist inspector and for reforms to encourage firms to seek help without fear of reprisals,
- On the Graham Review into the Small Firms Loan Guarantee, the FSB is calling for the speedy implementation of the recommendation to allow lending institutions, not the DTI, to make decisions regarding loans.
Source: FSB