Budget 2012: remove the shackles created by taxation

The budget is a real opportunity for the chancellor to free small firms to grow and drive the economy forward - and progressive tax reforms would send a powerful message that the government is open for business.

The Forum of Private Business is calling for a number of measures aimed at improving cash flow, creating employment and boosting skills, reducing costs and creating growth opportunities.

However, amid mounting concerns over disproportionate taxation and criticisms of HM Revenue and Custom's (HMRC's) activities, making tax simple and proportionate must be one of the chancellor's key aims.

We have recommended easing the burden created by corporation tax, VAT and rises in fuel duty and business rates as part of a tax strategy designed to facilitate entrepreneurial success and job creation, not stand in the way of it.

Specifically, we want changes to the £5,000 employers' National Insurance holiday, currently available for the first ten employees recruited by start-ups, so that it applies to the next two new staff members taken on by all small firms.

Further, the government is keen to incentivise equity investment but, in order to stimulate competition with mainstream banks, we have proposed handing tax breaks to private lenders as well.

This must all coincide with a shift in the attitude of HMRC and its inspectors towards small business owners, who often complain that they are treated like criminals from the outset while large companies routinely get away with tax avoidance. Simpler, less confusing systems and procedures would be a good start.

There are some immediate measures the chancellor could take to remove some of the shackles created by taxation but there is one definite conclusion - in the longer term, the UK's tax system needs to be reviewed and ultimately overhauled in order to create a true level playing field.

For more information on the Forum of Private Business click here, www.fpb.org.

In association with, Intuit


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