A review of tax administration for small business is the next task on the simplification agenda, the Office of Tax Simplification (OTS) announced today.
The OTS reports earlier this year found that tax administration is a key source of uncertainty and complexity for small businesses. Ministers have now asked the OTS to look closer at this issue, focusing on all aspects of the interaction between small businesses and HM Revenue & Customs (HMRC), and come up with concrete recommendations for improvements.
In a letter to the OTS Chairman, the Exchequer Secretary to the Treasury, David Gauke MP wrote:
The first OTS reports have provided the basis for some genuine moves towards a simpler tax system. To build on this excellent start, the Chancellor and I would like the OTS to look at ways to improve the tax administration for small business.
The next stage of the project will closely examine small businesses’ experience of tax administration and their contact with HMRC at key stages of the annual tax cycle. It will also look at the tax administration processes involved in starting and growing a new business. The OTS is drafting terms of reference and will shortly start gathering initial evidence of complexities, before reporting ahead of Budget 2012.
John Whiting, Tax Director for the Office of Tax Simplification said:
A clear message from the first stage of our small business project was that a big area of difficulty for small businesses was the administration that surrounds the tax system. I’m delighted that the Chancellor has endorsed our report and asked us to take it forward to the next stage.
It’s clear that many small businesses are struggling under the administrative burdens imposed by the UK tax system. We plan to set up surveys and more roadshows to really home in on what steps cause the most difficulties - and how the system can be improved, making it easier for businesses to get things right with the minimum of fuss.
Drawing on the recent reports, the OTS will also be putting forward further proposals for future simplification reviews to Ministers, aiming to announce its workplan for the next year by the summer.
Ministers have agreed that the work on the review of tax reliefs is now formally concluded. However, the OTS’s report is still being studied and the Office may well return to the areas of complexity highlighted in the report in the course of future reviews,
In his letter, David Gauke MP went on to thank Chairman Michael Jack, Tax Director John Whiting, and the rest of the OTS team for their work on the reviews, and said that he is looking forward to our progress throughout the life of this Parliament.
Notes to Editors
The independent Office of Tax Simplification was established on 20 July 2010 to carry out reviews in order to provide expert advice to the Chancellor on options to improve and simplify the UK’s tax system.
The OTS started its work in September and has initially taken forward two reviews: simplifying tax reliefs and small business taxation. It reported to the Chancellor on both in advance of Budget 2011.
The letter from Exchequer Secretary to the Treasury David Gauke MP can be found in the OTS section of this website.
The OTS has published a final report on the review of tax reliefs, and an interim report on the small business review. Full details are published on the OTS Tax Reliefs Review section of this website.
The OTS team is led by Chairman Rt Hon Michael Jack, and Tax Director John Whiting and has a staff drawn from HM Treasury, HM Revenue & Customs and secondees from private firms.
The OTS can be contacted at: firstname.lastname@example.org
Issued by Office of Tax Simplification Press Office
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