The Institute of Chartered Accountants of Scotland (ICAS) has written to George Osborne, the new Chancellor of the Exchequer, calling on him to address a number of serious deficiencies in the UK tax system.
Competitiveness: The United Kingdom needs to have a clear policy on taxation which encourages business to retain and develop UK based operations and headquarters.
Fairness: The tax regime for unincorporated businesses should be brought more closely into line with that for companies. Also, working should always be more profitable than not working, and the highest marginal rate of income tax should be limited to 50%.
Simplicity: Existing complexities should be cut to help ordinary individuals and small businesses self-assess their tax liabilities. Tax credits rules should be aligned more closely with income tax rules, personal tax allowances should be rationalised to reduce the bureaucratic churn of taxing individuals on small incomes and then paying them benefits, and income tax and National Insurance should be merged to simplify administration.
Osborne's priority, rightly or wrongly, will be to reduce the budget deficit as quickly as possible. Sadly, simplifying the tax system will not be his number one priority.
Tax does have to be taxing.
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Politicians are in charge....
ReplyDeleteForget it ...
"Fairness: The tax regime for unincorporated businesses should be brought more closely into line with that for companies"
ReplyDeleteEH? Surely what we need is a much simpler arrangement for small businesses. The amount of paperwork and the silly rules must make many give up.
For example, what is the point of putting expenses on P11D AND a tax return when it is the same person filling in both? Why do we need to bother with capital allowances for 2k's worth of PC and a printer?
Come to that, why do capital allowances exist at any level? Depreciation is necessary in the accounts to value the business, there is no obvious reason whatever why it should have a counterpart in the tax system.