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The CIOT has publicly voiced its 'extreme disappointment' with the Government's income shifting consultation.
In an open letter to financial secretary to the Treasury Jane Kennedy, the organisation's president, Rob Ellerby, criticised 'proposals to deal with this perceived problem in isolation, rather than through a wholesale review of the taxation of small businesses'.
Mr Ellerby was also damning of 'a proposal that… will unleash enormous administrative burdens for thousands of family businesses'.
The consultation document was released in early December, following HMRC's loss earlier in the year in the lengthy Arctic Systems case.
Reaction to the draft legislation was mainly negative.
The CIOT president made it clear that his organisation did not dispute that 'small business tax is unsatisfactory and in need of reform'.
However, he went on to claim that the new proposals on income shifting flew in the face of the Chancellor's 'vision of simplifying the tax system'.
'The Administrative Burdens Advisory Board has the task of reducing admin burdens of business, but these proposals are, if enforced, likely to wipe out any gains made by that body,' said Mr Ellerby in his letter to Ms Kennedy.
'The proposals seem to us to fail the tests of workability, practicality and certainty. They display little understanding of the businesses that government seeks to tax.'
