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FSB criticises government policies on SME tax

Published On 17 May 2007 at 11:17:06

The Federation of Small Businesses (FSB) has slammed the government's taxation policy, saying that it harms small and medium-sized enterprises (SMEs) in the UK.

Giving evidence to a House of Lords committee - which is investigating the tax implications of new policy on SMEs - the FSB said that the latest Budget will drastically increase costs for small businesses.

To improve the situation, the FSB called on the government to ensure that tax legislation was clear and specific and properly evaluated before it is implemented.

"Small businesses consistently tell us that a stable and simple tax system would allow them to create more jobs and stronger local economies," explained Mike Cherry, the FSB's financial affairs chairman.

"Among the changes in the past few years were tax incentives for small firms to incorporate, followed soon after by tax incentives for small firms to unincorporate - a costly and complicated procedure and a bizarre process for the government to expect small businesses to go through."

Mr Cherry said that the chancellor's move to cut corporation tax was wasted as many SMEs were unaware of the "complicated benefits" they could be eligible for.

Lat year, HM Revenue & Custom acknowledged that the current tax system places a harsher burden on SMEs than it does on large companies.

 

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