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Taxation, work and welfare
Small Business Tax Review
The Office of Tax Simplification has now completed its review of small business taxation, which identifies areas of the tax system that cause the most day-to-day complexity and uncertainty for small businesses and recommends priority areas for simplification.
On Tuesday 28 February 2012, the OTS published its final report on small business taxation.
The recommendations in this report are broken down into three papers. The first paper brings these strands together, and also covers the detailed recommendations on tax administration. The other two papers are stand alone documents.
- Small business tax review final report: HMRC administration (PDF 534KB)
- Small business tax review final report: Simpler income tax for the smallest businesses (PDF 486KB)
- Small business tax review final report: Disincorporation relief (PDF 430KB)
The Government has published a number of documents as part of the response to the OTS’s review of small business tax.
- Making tax easier, quicker and simpler for small business
- Response to the Office of Tax Simplification’s small business tax review final report: HMRC administration
- Simpler Income Tax for the Simplest Small Businesses: consultation document
- Consultation on a disincorporation relief
- Income tax and National Insurance Contributions
- HMRC IR35 guidance (HMRC website, PDF, opens in new browser window)
As part of the OTS's review of small business tax, HMRC commissioned a piece of external research on behalf of the OTS. This has been used extensively in arriving at our recommendations.
The background to this final report is set out below.
- Small Business Tax Simplification Review: terms of reference
- Small Business Tax Simplification Review: Consultative Committee
Interim report
On 10 March 2011, the OTS published the interim report of the review of small business taxation. As part of the initial report, the OTS was also asked to explore alternative approaches to IR35 (the intermediaries legislation).
This report highlighted several priority areas for reforming the taxation of small businesses.
- Small Business Tax Simplification Review: interim report (PDF 691KB)
- Press release: Initial simplification ideas for small businesses tax unveiled
- Small Business Tax Simplification Review: regional workshops
Second Stage
On 9 May 2011, the Government asked the Office of Tax Simplification to carry out a review of tax administration for small businesses as part of the next stage of the review.
This work will identify changes that can be made to simplify and improve the processes.
- Government response to OTS recommendations - Small business tax review: Improving small business' experience of the tax system (PDF 2MB)
- Press release: Ministers ask simplification team to review small business tax administration
- Small business tax administration: terms of reference (PDF 373KB)
- Alternative system for taxing the smallest businesses and relief for disincorporation: terms of reference (PDF 76KB)
On 28 July 2011, the OTS published two discussion papers to invite comment on the issues of a simpler income tax system for the smallest businesses and disincorporation for small companies. These documents are available below:
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