Improve the system for all size businesses

The Office of Tax Simplification (OTS) has set out steps to modernise and simplify the corporation tax computation in its latest report. It considers four areas:

• simpler tax for smaller companies;
• aligning the tax rules more closely with accounting rules where appropriate;
• simplifying tax relief for capital investment; and
• issues affecting the largest companies.

It also highlights the links with HMRC’s work on digitising tax which offers the impetus to move towards a simpler system by using the latest technology.

For micro-companies the principle would be to ‘do it once’. If the business has to prepare accounts the work that it puts in should be enough to deal with the tax computation with only minimal additional input.

Slightly larger companies should need to consider a set list of only five or...