Tax system unfair, say SMEs » SMEInsider

Tax system unfair, say SMEs

Directors working SMEs have been voicing their dissatisfaction with the current tax regime, with two thirds calling it biased and unfair, with a further half saying they feel ‘voiceless’ about government decisions that affect their business.

New research released today by Chorus – a new membership community launching this week to champion the voice of the country’s 5.2 million micro-businesses – showed that SMEs are especially vexed about the current tax environment in the light of recent revelations over corporate tax avoidance. Just one in 10 business owners are satisfied with the way the tax and benefits system treats the country’s smallest firms.


Ignored by mainstream debate

Jason Kitcat, micro-business ambassador for Chorus, said: “Micro-businesses represent a staggering proportion of the UK’s economy, employing 8.4 million people. Yet our research shows that the UK’s micro-businesses feel ignored by mainstream political debate and that they feel powerless to influence policy making with a taxation and benefits system that is stacked against them.

“Micro-businesses are the unsung heroes of our time, driving our economy forward and we think it’s time they receive support and representation that reflects this.


Time for action – CIoT

The news of SME discontent with the tax system comes in the week when the Chartered Institute for Taxation (CIOT), IFS and the Institute for Government (IFG) think tank have joined forces in a project calling for better tax policy making, and will recommend their findings to the Treasury.

Jill Rutter, the IFG programme director, said in a blog post that “The UK has a looming tax problem. In the 2015 election campaign the Chancellor opted to voluntarily fetter his discretion on the major taxes – income tax, national insurance contributions and VAT and has shown no appetite for increasing fuel excise duty. Meanwhile the National Audit Office has recently drawn attention to the Treasury’s lack of control over tax reliefs.

This is why the IfG, the Chartered Institute of Taxation (CIOT) and the IFS have launched a project to explore whether we can have better budgets and make tax policy better. It’s a huge agenda: we hope to make a start by producing ideas for change later this year.”