When the Chancellor announced that he would be preparing the second Budget of the year in the wake of the Conservatives’ general election victory, he may have been under the impression that he would be able to use it as a vehicle for his own plans to balance the country’s books. However, it has become increasingly apparent that any attempt to avoid the bigger issues will not be looked upon favourably by those who are expecting him to reveal plans which will make life easier for independent professionals whose contribution to the economy is becoming increasingly vital.
The Federation of Small Businesses has impressed on him the importance of reforming the tax system by revealing that more than half of their members would like to see him introducing a simpler and more user-friendly tax system. Joining the FSB’s voice is that of the Confederation of British Industry who have asked the George Osborne to provide ‘clarity’ about the array of business taxes that workers in the UK have to contend with.
The CBI believes that a move which would provide some reassurance to owners of small businesses would encourage entrepreneurship, which is one of the reasons that they are also asking him to set the Annual Investment Allowance at £250,000, a move which they hope will be made permanent from 2016. The group have presented the Chancellor with a ‘Business Tax Roadmap’ which they hope will encourage Mr Osborne to commit to making good decisions when it comes to taxation and policy making.
However, these attempts to direct the Chancellor towards their own agenda will have to share space with Mr Osborne’s own vision for an employment tax which will create jobs and improve the employment figures by attracting overseas workers to bring their expertise to our shores. He is also keen to ensure that HM Revenue and Customs have enough resources to ensure that they are able to operate effectively by 2020.
The resources needed by small businesses in order to remain compliant with the variety of rules and regulations imposed by HMRC are on the increase, to such an extent that one accountancy group commissioned polling organisation YouGov to measure the impact of the red tape. The results showed that 25 per cent of owner-manager businesses find that they need to spend more than the recommended maximum of a day dealing with their accounts in order to remain compliant. Some are spending 6 days or more a month ensuring that their finances are in order which adds up to a significant amount of time which could otherwise be spent generating income. It is for this reason that these organisations have been applying pressure to the chancellor to make some changes.
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