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Strangling small business
All Areas > Legal & Finance > Money Matters
Author: Roger Downes, Posted: Monday, 24th April 2017, 08:00
The Government talks one story for small businesses, telling us how much they are reducing red tape, and then does completely the opposite.
It has created a whole new department called the Office of Tax Simplification to examine ways of doing what it says in the name, but with every Budget come more complications than simplifications.
The inability of successive Governments to finance state pensions, whilst still paying attractive final salary versions to its own employees, has led them to force all businesses of whatever size to automatically enrol their workers into a pension scheme. Don’t get me wrong, I think that employees should be encouraged to save for their retirement years, but the amount of additional work and cost imposed on small businesses is substantial.
More red tape for proprietors of small businesses
If that wasn’t enough, then Chancellor George Osborne decided to levy a 7.5% surcharge on tax on dividends. OK, he thought those running their own company were gaining too great a benefit from effective tax planning through paying what he saw as too much dividend compared to salary. But did he think through the effect that this would have on the number of people needing to submit a tax return? Certainly not. Anyone earning more than £5,000 a year in dividends is now obliged to register with HMRC to submit a tax return – and all to collect relatively modest amounts of tax. More red tape for proprietors of small businesses.
No-one in government has ever lived in the real world of small business
Osborne has left number 11 following the EU referendum result and Philip Hammond has taken his place. His first act? To scrap the flat rate scheme for VAT. OK, he hasn’t scrapped it, but he has certainly neutralised any benefit to being in it and everyone who I know that is currently using it will have ceased to do so by the end of the year. Why? Because there used to be a financial benefit, as well as simplicity, in completing your VAT return every quarter. Now small businesses up and down the land and certainly all over Gloucestershire will be forced to spend five times the amount of hours producing their returns, simply to put just a few shillings in the Treasury’s coffers. Outrageous.
It all stems from the fact that no-one in government has ever lived in the real world of small business. If anyone from any party suggests they are the champions of small business, tell them you don’t believe them!Copyright © 2024 The Local Answer Limited.
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