Big tax changes for small businesses

Small business taxation is facing major reform with the potential merging of income tax and national insurance contributions, new approaches to taxing very small, unincorporated businesses, and a review of IR35 rules, says Francesca Lagerberg, Head of Tax at Grant Thornton.

In his 2011 budget speech, Chancellor George Osborne announced changes to the way small businesses are to be taxed. This follows the advice and recommendations proposed by the Office of Tax Simplification (OTS).

Following its initial review of the tax reliefs available in today’s tax system, the OTS’s second job was to carry out a review of small business taxation (PDF). The interim report, published on 10 March 2011, identifies those areas of the tax system that cause the most day-to-day complexity and uncertainty for small businesses, and recommends where to prioritise efforts in simplifying the regime.

The overwhelming conclusion is that major structural changes are required if the Government is to achieve a genuine and long-lasting simplification of the UK tax system.

Read more: http://www.grant-thornton.co.uk/thinking/elevate/index.php/elevate_templates/article/big_tax_changes_for_small_businesses/#

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