Time to address smaller businesses’ tax concerns

A report from the Office of Tax Simplification (OTS) explores the tax challenges a developing small business might go through in its engagement with the tax system. Small businesses make up more than 99% of all the 5.7 million businesses in the UK; they employ 12.9 million people and pay more than £205bn in tax. 

The report contains recommendations in five areas as well as other suggestions for improving HMRC processes.

Bill Dodwell OTS tax director said: ‘Many new businesses are formed without sufficient help and guidance. This can lead to mistakes being made resulting in substantial costs or penalties as their tax compliance affairs are put in order. We recommend that government offers better and more readily accessible guidance joined up across government and communicated through multiple channels to help people starting small businesses.’

The report states that PAYE system problems lead to significant costs...