The Office of Tax Simplification has been approached by the Treasury to look at how excessive administrative burden can prevent development of small businesses. David Gauke, the exchequer secretary, wants HM Revenue & Customs to interact with small businesses more efficiently, especially new businesses who are looking to prosper.
The Pay As You Earn system is one of the initial areas for improvement, especially where individuals have more than one job. David Gauke has shown his approval at a flat rate of PAYE when a company is within the first five years of trading. The OTS was created with a base of volunteer staff to look at ways to improve complex legislation. The Treasury is now looking for a permanent tax director and chairman for the OTS, which suggests that it could become a permanent fixture.
The interim tax director of OTS acknowledges that a large number of small businesses are struggling with HMRC administration. Tax relief is being looked at, with 155 out of 1042 being reviewed already. HMRC legislation is so complex that it is relatively easy for a company to unintentionally fall foul of regulations. A low cost accountants will take care of all relevant legislation, including the meeting of deadlines. Accounts and self-assessment tax returns all have to be submitted in a timely manner to avoid penalties and interest payments. Online accounting has become a popular method for small businesses to ensure that they are aware of updates and amendments to legislation, without unnecessary cost.
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