Mortgage News
Chancellor prompts probe to simplify small business taxation
The Office of Tax Simplification (OTS) is to review how the tax system works for small businesses after a request by chancellor Philip Hammond.
In a letter to the OTS, Hammond (pictured) asked the body for any proposals it may have to simplify tax-related issues in the day-to-day life of a small business “which can cause administrative complexity”.
He acknowledged that many small businesses find it complex and burdensome to fully understand their tax obligations, which in turn leads to potential concern and error.
As a result, the chancellor recommended a review into the area.
The full scope and detail of the review will be agreed between the OTS and HM Treasury in the coming weeks, but Hammond highlighted some initial key subjects.
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“The review should include a focus on the reasons for error by a small business, such as the clarity of guidance or tax administration issues,” he said.
“You should also look at other practical tax-related areas such as how the tax system helps businesses manage their cash flow or the tax administrative impact of taking on an employee,” he added.