Changes to #tax aimed at helping smaller firms
The Office of Tax Simplification (OTS) has set out plans for easing the tax burden that many small enterprises face.
One suggestion is that the capital allowance limit for small businesses should be determined for a set number of years so that firms can be more certain about the tax reliefs for investment and can plan ahead.
The present limit is £25,000, but, the OTS added, that threshold could be divided across two years. This would enable firms to recoup allowances on major purchases that may otherwise be forfeited.
Another OTS recommendation is that the way in which employee expenses are dealt with under the tax system should be less complicated. This could involve exempting the need to report up to a ceiling of £500. At the moment employers and employees must inform the authorities of reimbursed expenses or face a liability for tax.
Consideration was also given to business structure. Very small businesses, perhaps with just one employer and shareholder, that wish to dis-incorporate, that is shed their company status, should be allowed to do so without having to cope with an immediate tax charge.