This follows a request by chancellor Philip Hammond last week (pictured), when he asked the body for any proposals to simplify tax-related issues in the day-to-day life of a small business “which can cause administrative complexity”.

The review takes into account particularly those with £2m turnover or less or fewer than 10 employees.

The review will consider issues such as the accessibility and clarity of guidance and support in relation to the process of setting up a business, including issues arising from the interaction between an individual’s personal and business affairs.

It will also take into account how a business works out and administers its taxes, sources of error and unnecessary complexity, and ways these could be eased or mitigated.

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The way the tax system handles unprofitable years or shorter-term cash flow issues and the extent to which the tax system helps businesses manage the cash flow demands of paying tax more generally will also be looked at.

In carrying out its review, the OTS will liaise with the Administrative Burdens Advisory Board, consider the likely implications of recommendations on the Exchequer and on compliance with the tax system, take account of relevant international experience and establish a Consultative Committee to provide support and challenge.