SMBs blast government over tax strategy

Claims from Forum of Private Business members that system is complex and unfair with business rates being biggest bugbear

Taxes in the UK are punitive and complex with very little return for the money, according to a report by the Forum of Private Business (The Forum).

The specialist small business support group polled its members to gauge attitudes on coalition-implemented tax changes as it reaches its mid-office point.

In general the changes were seen to be negative in terms of resolving issues of fairness, simplicity, efficiency, stability and certainty in the tax system.

A total of 28 per cent of respondents felt the fairness of the tax system had deteriorated, compared with 17 per cent who felt it had improved.

Nearly a quarter thought it had become more complex, with 14 per cent believing it had been simplified.

Tellingly for HMRC, 26 per cent of respondents said the efficiency of the tax system had got worse, with just 10 per cent believing it had improved.

And this does not bode well for the new Real Time Information (RTI) strategy that is coming into force in April, with significant fears about how the government will administer this momentous change.

Business rates were revealed to be the biggest sticking point, with a whopping 94 per cent of all business owners questioned believing the level of taxation on commercial properties was too high.

Two thirds of those also said they saw no real benefits for the amount of money they were spending on the tax, with just three per cent saying they had no problem with it.

Phil Orford, chief executive of the Forum, said: "It is probably fair to say that business rates are the most despised of all commercial taxes by today’s small business owner in the UK. It is a crippling tax that business owners simply have no choice but to pay, and for many who claim to see no discernible benefit to having paid up, it clearly sticks in their craw.

“While there is no doubt that businesses should pay their way for services such as bin collections and for roads to be properly maintained, many feel their hard-earned cash is not being spent wisely, or certainly not for their advantage or benefit. It is evident that business rates are increasingly being viewed as a crude lever to extract cash from hard-working entrepreneurs, much of which they will never see again. We tend to agree."

He added: “This research shows George Osborne really has to consider – and seriously – making a credible concession to small business in the Budget on this moot point. Businesses are clearly unhappy about the spiralling costs of NDR, and we think the tipping point is about to arrive, if it hasn’t already. If rates keep charging upwards, businesses are going to go bust – it is as simple as that.”