Business experts call for tax reform that supports entrepreneurs
Significant reform to the UK’s punishingly complex? tax system is required to drive startup growth and boost job creation in Britain, a new study has recommended.
The lifecycle of entrepreneurs in the UK was examined in the Britain Unlocked: A Tax Code for Global Ambition? report, conducted by a collective of organisations representing the interest of entrepreneurs and small enterprise in Britain.
Carried out by the Institute of Directors, among other bodies, the study made a series of practical and radical recommendations to HMRC, targeting the pinch-points? in the tax system that prevent entrepreneurs from scaling-up.
Recommendations for immediate tax reform included the extension of national insurance relief as an incentive for further recruitment removing the cap on entrepreneurs? relief to encourage the continued growth of a startup, and the consolidation of all existing share schemes into one simplified online scheme, supporting self-certification for small business owners.
The study also advised the instant introduction of business rates holidays for entrepreneurs, alongside a significant increase in business rates relief raising the cut-off from 15, 000 to 25, 000.
This threshold extension, the group argued, would support small retail businesses driving growth in town centres, providing employment in a sector that has struggled to keep pace with the online world.
A long-term tax reform put forward in the study to support startups suggested combining national insurance (NI) and income tax, targeting a common area of confusion for small business owners managing their own payroll.
Stephen Herring, head of tax at the Institute of Directors, said that the role of entrepreneurs in paying back into the system should be met by government policy that does more to create ‘simple and fair taxes that boost innovation and business creation.
in this report we put forward measures which will help a wide variety of entrepreneurial businesses become job-creating machines, increasing economic growth and revenues for the Treasury, he said in a statement.
Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.
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