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More rent-a-quote nonsense
So Mr Maugham criticises a policy because basing it on geography rather than need makes it "unfair"? Would Mr Maugham like to make a practical suggestion about how you would target the holiday on need? I feel sure that a policy that targeted some districts across the whole country but not others would be a nightmare, complex, and be entirely unfair on those on the boundaries in different towns. Incidentally, this is the same chap who says the tax system is too complex and taxes are too high: http://www.telegraph.co.uk/finance/economics/7962524/Tax-regime-drives-20pc-of-big-businesses-to-consider-leaving-UK.html. Strange then to criticise a scheme, albeit for small rather than large businesses, that reduces the tax burden for lots of new businesses. Lucky he doesn't need to be consistent in his rent-a-quotes...
But generally a brilliant insight into the minds of those who like to shine their exertise on the rest of us; let's criticise the Government for introducing a policy to help new businesses becaue it excludes some businesses. Well, Mr Maugham, you may not realise there is a limited pot of money available. The alternative is rarely making it available to everyone; the alternative it is usually making it available at all. Worth thinking about.
And of course Mr Maugham fails to put the holiday in the broader context of other tax reductions for small businesses, including small profits rate of CT and business rates holiday. Life ain't so bad.
Crazy
Who actually thought this complex piece of bureaucracy is going to help improve anything.
Madness.
NIC holiday
While I support the idea behind this new initiative I can see that there might be some headaches ahead for those businesses qualifying for the scheme. As the separate return required that the business is on the scheme cannot be filed on line but will be sent in paper form, which as we know can sit at HMRC's office for weeks before correspondence is processed, while the actual P35 is filed on line and will show the full amount of NIC due and NIC paid as less than that amount, I anticipate that those employers will be receiving demands for failing to pay the difference and being charged penalties. This is going to require a lot of appeals on behalf of employers and/or advisers. This is going to create a lot of paper and require a lot of time to sort out. Unless someone has the foresight to include a box on the P35 which could be ticked to alert HMRC that the business has operated the NIC holiday scheme. I suspect this will not be the case...
Comments
We've had a few comments in about this story. Here's one from the Forum of Private Business:
“For years small business taxation has steadily increased, so this reduction in NI for some firms has to be welcomed,” said the Forum’s chief executive Phil Orford. “However, if the government is serious about creating conditions for real economic recovery based on strong small business growth, it needs to introduce even bolder tax policies.”
He added: “Given the significant threats to cash flow and business growth from issues such as a lack of bank finance and increasing late payments, recruitment is likely to be slow during the first 12 months for many new firms. The scheme should be available for a longer period than just the first year they are in business.”
Will it reallly help?
Now, you are not allowed a business split or a takeover. You also can't be involved in a similar prior one, so I can't open a branch in Newcastle and qualify, or take someone over in Leeds. Ok I get it...
Over the last 10 years, I reckon I have seen 2000 clients start new businesses that would have qualified... but all here ...ie here in the South East ..oh...so they dont . However even if they did, I reckon out of them there are 5 that have more than the MD and his wife working there ( and we all know the MD and his wife pays no PAYE). None have more than 5 employees. Most New businesses struggle to get the work to keep the founder busy let alone new staff...
So in my opinion its a lot of hot air and you can argue about geography but its irrelevant. The Govt reckon it will create 800,000 new jobs....I think they will be lucky if they get 8,000.
Which works nicely for the Govt Big Tax saving ..Fanfare...result...no loss to treasury
Bet you a pint they dont publish the take up rate....
But then what do I know, Im just a simple accountant...sigh...