The Office of Tax Simplification (OTS) has published a report ‘Simplifying everyday tax for smaller business’, It suggests that there is much the government can do to make life easier for small and micro business.

This is another report commissioned by the Chancellor of the Exchequer to look at the lifestyle of a small business.

  • 99.4% of UK businesses are defined as small, 75% of UK business are micro businesses which do not employ anyone other than the owner(s) and 70% of small business use tax agents.

The report considers the steps in a business’ life from ‘the cradle to the grave’ and provides examples of common problems ranging from the difficulty in finding clear advice on the YouGOV website, to having to pay exorbitant fees to R&D consultants.

The OTS recommendations cover five themes:

  • The providion of simple step-by-step guidance about the key things a business needs to do in its early days to help things run smoothly. 
  • Improving the operation of the PAYE system
  • Implementation of HMRC’s Agents Strategy
  • Improving the mechanics of the Corporation Tax return process
  • Ensuring that tax changes are built on an understanding of business processes.

The OTS makes some recommendations that some small business advisers may not welcome such as introducing a ‘PAYE-like experience’ for the self employed.

It does not consider the potential impacts and issues with Making Tax Digital for VAT or the proposal to make taxpayers file five tax returns per year.

It does call on government to prioritise action to address long-standing concerns about the experience of smaller businesses.

Useful guides on this topic

Starting in business: Start here
Checklist to help you set up the right kind of business for your needs.

Employer guide to PAYE RTI
All about the tax filing obligations if you are taking on staff

R & D Zone
All about R & D with worked examples covering the different types of claim.

Making VAT Digital
All about Making Tax Digital for VAT

External links

OTS Report: Simplifying everyday tax for smaller business