As the Coalition reaches the mid-point of its five-year term of office, research among Forum of Private Business (FPB) members shows that the majority of small businesses in the UK have taken a dim view of changes made to the tax system by the current government.
Overall, the changes were seen to be negative in terms of resolving issues around fairness, simplicity, efficiency, stability and certainty in the tax system.
In total, 28 per cent of business owners say they thought the fairness of the tax system had deteriorated, compared to 17 reporting an improvement. A quarter think it has become more complex, opposed to 14 per cent saying it has simplified. And dealing a blow to HMRC, 26 per cent say the efficiency of the tax system has worsened – just 10 per cent think it has improved.
The single biggest complaint is business rates. A huge 94 per cent of all business owners feel that the level of taxation on commercial properties is now too high. Two-thirds also say that they see no real benefits for the amount of money they are spending on the tax.
“It’s fair to say that business rates are the most despised of all commercial taxes by today’s small business owners,” says Phil Orford, chief executive of the FPB. “It’s 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 certainly sticks in their craw.
“While there’s 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’s evident that business rates are increasingly being viewed as a crude lever to extract cash from hard working entrepreneurs, much of which they’ll never see again. We tend to agree.”
With only a few weeks before this year’s Budget, the research should be an eye-opener to Chancellor George Osborne. Does he have anything up his sleeve to keep small business owners – the engine of Britain’s economy – happy?
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