Small businesses challenge HMRC to reform “complex” tax and VAT system
The vast majority of small UK business owners believe an increased tax burden is holding their firm back, according to a new report.
After surveying the opinions of over 1, 100 small firms across Britain, the British Chambers of Commerce (BCC) found that 75% believed the overall burden of tax administration and compliance or HMRC red tape has increased in the last five years.
Two-thirds of respondents said VAT compliance had become the greatest time-drain, as business owners of all sectors and sizes struggle to understand the different rules and rates of VAT.
In response to its findings, the BCC called on government to focus on reducing the complexity of VAT rather than debate threshold reform, in order to boost small business growth.
if the government wants its Global Britain? vision to become a reality, it is time to tackle the huge costs and complexities of the UK tax system, which sap away time and resources that could be better spent raising business productivity and growth, said Adam Marshall, director general of the BCC.
hMRC must be given both resources and a clear remit to focus more on supporting, rather than pursuing and punishing, small and medium-sized firms, as they work to get tax right.
we want to see more investment in frontline HMRC support that’s geared towards making compliance easier for SMEs. There should also be greater independent scrutiny of new tax proposals with the aim of minimising the administrative burden on business. Making tax administration simpler would provide businesses with more time and headroom to focus on investment and growth.
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.