Starting in 2018, many small businesses may be required to submit tax returns four times a year as opposed to the single return currently required.
The idea behind this is apparently to bring small businesses into line with the practices which large companies and corporations have to adhere to, but as with so many initiatives from this Government there has been little thought given to the problems which will be experienced by small businesses in complying with this. Most small businesses are sole traders and micro-entities without any internal accountancy capability in their companies. This means they have to contract out their financial needs to firms which of course charge for their services – a charge which will be quadrupled at a stroke by these changes.
This will impose an enormous additional administrative cost on small businesses - many of which will be unable to cover them, and may force many small businesses out of business altogether.
Small businesses already work under an immensely expensive administrative burden thanks to our membership of the European Union – it is estimated it costs small businesses up to ten times as much per employee to comply with EU directives than it does for a large company.
The last thing these businesses need is another blow to their competitiveness and profitability through heavy-handed legislation delivered by our own Government. There is still time for the Government to change its mind about this, but my suspicion is that this is all part of a drive towards more automation of our tax system to cover up the cracks caused by budgets cuts to Her Majesty’s Revenue and Customs - and as usual it is normal people and small business owners who will suffer for it.
UKIP MEP for East Midlands