In a new report, the Office of Tax Simplification (OTS) has called for the government to carry out ‘urgent work’ in order to simplify the business tax system for UK firms.
The OTS report examined how the tax system affects businesses at each of the key stages of their development, from start-up to succession planning, and highlighted the complexity entrepreneurs face when seeking to establish or grow a business.
Within the report, the tax reliefs and charges that apply to new and growing businesses were examined in order to discover how well they achieve their objectives. Entrepreneurs’ Relief (ER), capital gains tax (CGT) gift relief and inheritance tax (IHT) reliefs for business assets were analysed, with a view to outlining their differences and interactions.
The OTS concluded that the reliefs and charges would ‘benefit from an overhaul to reduce complexity’, which would help to make reliefs ‘more accessible’ to firms. The regulatory body hopes that, if the government undertakes such a revamp, businesses in the UK will be able to ‘better fulfil their potential’.
Paul Morton, Tax Director at the OTS, said: ‘This paper takes a significant first step towards meeting the pressing need to undertake a detailed review of the tax system as it operates across the business lifecycle.
‘It is aimed at helping the businesses that are the lifeblood of the UK economy to maximise their opportunities and to make the system clear and simple to understand and use.’