The Office of Tax Simplification (OTS) has put forward its recommendations to simplify UK’s tax system for small business to the Chancellor, ahead of his March 2012 Budget.
The key recommendations are:
• Tax Administration - the use of two-way email communication, better VAT rulings and information and a dedicated helpline for small businesses.
• Simplified taxation for the smallest businesses –default cash accounting instead of full ‘GAAP’ accounts with a wider range of flat rate expense allowances with an “opt-out” allowing those to select the system that is most beneficial to them.
• Turnover tax - a full study is undertaken of a turnover tax as a possible alternative taxation method for the smallest businesses.
• Disincorporation –the introduction of a tax relief so that companies can disincorporate without incurring significant tax cost.