Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

Entrepreneurs hail tax holidays for start ups

by
12th Jan 2012
Save content
Have you found this content useful? Use the button above to save it to your profile.
Entrepreneurs urged the government to introduce a tax holiday for start-up businesses during an exclusive webchat from 10 Downing Street.
The live debate, organised by AccountingWEB's sister site BusinessZone, focused on the barriers entrepreneurs face when creating new business models. The discussion was led by a panel that included:
  • Mark Littlewood, director general, Institute for Economic Affairs
  • Giles Andrews, co-founder, Zopa
  • Shirley Letts, assistant director, Red Tape Challenge
The subject of tax holidays for start-up businesses created a stir following member David Lessels’s call for an amnesty on patent fees. Littewood responded: “I think this is a potentially attractive idea - it swerves round red tape hurdles effectively.”
Accountant Emily Coltman commented that a tax amnesty for small firms would be a good thing to help small business owners struggling with the complexity of UK tax rules.
Littlewood replied: “I think holidays/exemptions can be a good second best option. But you have to consider possible market distortions. For example, assume that someone sets up a restaurant and gets a tax holiday for two years. Don't they just close down and open a new restaurant in year three - ie end up on a permanent tax holiday?”
He later explained his first preferred route was a massive overall reduction in red tape and tax. He added: “But I can see the argument that the truth is that the former sort of acts as a 'poll tax' on businesses. It's not too difficult for big business to comply - they can employ a few dozen people in their compliance unit. Not an option for an SME with 10 employees though!” 
Regarding a question on tax simplification, Littlewood said: “The UK has - by most measurements - the longest tax code in the world. (About 14,000 pages and a word count about five or six times the Complete Work of Shakespeare, I'm told).”
He added: “Very often the debate focuses on the burden of tax (and that does need to be addressed), but this means the issue of tax simplification is too often overlooked.”
Letts advised the Office of Tax Simplification is taking forward a small business tax review to look at the administrative burdens. The government is expected to publish the report before Budget 2012, she said.
BusinessZone members further quizzed the panel on the Intra Company Transfer scheme, data protection burdens and the future of British high streets.
Letts ended the discussion with a call for members to submit their comments to the Red Tape Challenge website.
To replay the live chat in full, click here
Tags:

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.