...of the competiveness of the UK tax administration
Yesterday the Office of Tax Simplification (OTS) published a letter from David Gauke, the Financial Secretary to the Treasury, which sets out the Government response to the OTS review of tax administration. This was referred to in the Autumn Statement but the detail was only published yesterday. Arguably, for many businesses, particularly mid-sized, it is the most relevant and potentially useful part of the Autumn Statement.
Jonathan Riley, Partner and Head of Tax at business and financial adviser Grant Thornton UK LLP, comments on the implications for business as a result of this review: “Our report with the CBI on tax burdens faced by mid-sized businesses (‘stuck in the middle’) showed that unnecessary rules in tax administration often have a disproportionate impact on business growth. The OTS review of tax administration echoed many of these points and we called for changes in autumn statement. It is heartening to see 29 of OTS’s 58 recommendations agreed and 22 ‘for further consideration.'
"Many of the recommendations to ‘be considered’ really mattered to mid-sized businesses, such as raising the threshold of transfer pricing, which would make exporting easier and tweaking the quarterly instalment rules for corporation tax so that they no longer act as a break on growing firms. It is a shame that the Minister's letter indicates that consideration of these measures will now be delayed until the next Parliament – we really need faster action to ensure the tax administration supports growth.
"What is encouraging is the HMRC commitment to a new approach to supporting mid-size businesses, which Grant Thornton has been calling for over the last year and which will now be launched in 2015, and the fact that more radical measures, like integrating Income Tax and National Insurance, have not been rejected outright. Grant Thornton (together with the CBI) will continue to keep these issues on the agenda and make sure they are not pushed into the long grass.”