I have, for a long time now, been promoting the case for simplifying the UK’s tax system, arguing this would make it far easier for start-up businesses to expand.
A study – Britain Unlocked: a tax code for global ambition – warns that the current regime creates too many obstacles for those who have launched an enterprise and are keen to grow. A sentiment I wholeheartedly agree with.
Businesses are deterred from hiring more staff, moving to a bigger premises or pursuing larger contracts because of the daunting framework of tax requirements. We need to be releasing these shackles rather than tightening them.
Among the report’s proposals include raising the cap on the Seed Enterprise Investment Scheme (SEIS), merging income tax and National Insurance, returning the Annual Investment Allowance to £500,000 a year and enabling companies with profits of less than £5million to pay Corporation Tax annually. All of these are very sensible measures.
The report also proposes an increase in the capital gains tax annual exemption which I am not sure is necessary given the already generous Entrepreneurs Relief treatment available.