Businesses must have their say in tax reform

PKF has produced a practical online guide for businesses concerned about the Government’s proposed corporation tax reforms. According to Simon Littlejohns PKF tax partner, the reforms are likely to increase paperwork and red tape - without significantly increasing the tax take.

The proposals will affect every company in the land and the PKF briefing at www.pkf.co.uk/businesstax outlines what they will mean - particularly for Small and Medium Sized Enterprises (SMEs).

Formal responses to the Government’s proposals (66 questions in all) are required by 3 November but PKF has identified the nine key issues for SMEs so that busy business managers can register their views through a quick online survey. The survey results will be passed on to the Inland Revenue as part of the consultation process.

The three main issues addressed in the consultation document are reform of the schedular system, the tax differences between trading companies and investment companies and the taxation of capital assets.

Simon Littlejohns said: Although, the aim of the proposed reforms is to create a corporation tax system which is competitive and fair, not every company will benefit from the changes. Businesses should make sure they have their say now.

The reform process has to date on focused intangibles, substantial shareholdings, loan relationships and research & development. There is also recognition that the corporation tax regime must move with economic developments and changing accounting standards. But it is the comments in connection with transfer pricing and capital allowances, and the extra red tape they may generate, that are particularly worrying for SMEs.