Osborne pledges simpler biz taxes
No actual numbers here
Chancellor of the Exchequer George Osborne told the CBI last night that he wants a simpler corporate tax system and lower rates.
The Conservative manifesto promised to cut corporation tax from 28 pence in the pound to 25 pence in the pound. But that pledge has been replaced with a new joint agreement between the Tories and the LibDems which was sort of published today.
Speaking last night, Osborne offered a sneak preview of that agreement. He said: “We will reform the corporate tax system by simplifying reliefs and allowances, and tackling avoidance, in order to reduce headline rates.
“Our aim is to create the most competitive corporate tax regime in the G20, while protecting manufacturing industries.”
The lipless nightstalker said he would lay out a five-year plan for corporation tax when he gives his budget in June.
He said small businesses would benefit from his plan to abolish employers' National Insurance contributions for the first ten members of staff. The full speech is here. ®
hmmmm, think again?
"Split your company into separate companies of 10 or less people and never pay Employee [sic] NI again."
and you'll just end up with multiple auditors fees and all the other overheads instead
and you'll look like a complete twat in the eyes of HMRC
Find me a business of any size which isn't on the fiddle - sorry, exploiting allowances, tax classifications, and loopholes to the very maximum extent allowed by law. You have to do that in order to survive, or your competitors will eat you alive.
So closing loopholes in order to reduce the headline rate of tax is at best a zero-sum game for any real business, depending on how much the headline rate comes down (if any).
This might be viewed as bad news for accountants, but it's quite the opposite, since they'll just have to work harder (and bill more) to find the remaining - and doubtless some new - loopholes.
The tax code needs re-doing from fresh, starting with a flat rate and no (nada, zero, zilch) wheezes or loopholes, not yet more token fiddling around the edges.
Only for PLCs. LLP and Ltd have totally different regs where that is concerned so not a completely daft idea in theory. Though the admin overheads and the HMRC thinking your are hiding something will not help.