The UK Tax System - A Help Or A Hindrance For Growing Businesses?

 
FREE EXCERPT

Is the UK tax system helping to make Britain a competitive and attractive place for growing businesses?

The Government's 'Plan for Growth' includes ambitions to ensure that progress is made towards creating the most competitive tax system in the G20 and making the UK one of the best places in Europe to start, finance and grow a business. So while Government is definitely 'talking the talk', can it 'walk the walk'?

New and growing businesses

Work is currently underway to modernise the way global corporations are taxed, so that the UK is a more attractive location for them. But what about UK-based businesses and, in particular, new and growing businesses?

There have been some encouraging signs.

A substantial up-rating in the value of entrepreneurs' relief in the last year or so, which should encourage serial entrepreneurs to invest. A consultation on new proposals that would encourage non-domiciles to invest in UK businesses. In addition, enterprise investment scheme (EIS) relief has become more attractive for the current tax year and the conditions are due to be relaxed further next year. However, the rules themselves are not simple and the use of EIS as a means of financing growth remains relatively uncommon.

The Office of Tax Simplification (OTS) has reviewed all the tax reliefs in the tax code and issued a small business tax simplification report. It is now looking at the possibility of a new system for taxing the smallest businesses and Government is consulting on merging the administration of income tax and national insurance (NI).

The establishment of the OTS has been encouraging, although there is concern that they are merely 'rearranging the deckchairs on the Titanic'. A recent survey published...

To continue reading

REQUEST YOUR TRIAL