Tax Simplification - Good News, but not necessarily for accountants!
24 March 2012
An accountant welcoming tax simplification sounds rather like a turkey voting for Christmas, but it is encouraging to hear the Chancellor promising a ‘modernised tax system’. Removing unnecessary administrative burdens must be the desire of anyone in business and most accountants share that view.
So small businesses with income up to £77,000 will from April 2013 be permitted to chose to produce accounts on a simple cash receipts and payments basis. Once businesses are within the scheme they will be permitted to stay within it until their turnover exceeds £150,000. Companies as well as the self-employed will be able to go for this simplified basis.
Under this scheme there will be new rules concerning standard claims and allowances and for small companies generally the Government is looking at ways of making it easier to disincorporate.
These are welcome announcements and remove unnecessary levels of bureaucracy for certain small businesses.
But beware, record keeping is essential no matter what your size of business and there are hidden traps for the unprepared as any Inspector of Taxes would tell you!