The office of tax simplification (OTS) is proposing fundamental changes to business structures and taxation thereof.
One that jumped out at me is changes to the way that micro entities (defined for the purposes of the proposals as under 10 staff) will be taxed.
The proposal is to adopt the New Zealand look through system where the shareholders of micro limited companies are taxed based on the companies profit rather than micro companies being subject to corporation tax itself (the tax system looks through the business model to the ownership behind it).
What the OTS seem to be doing is creating a self employment / limited company hybrid.
Much of the detail of their proposals has not been announced but there are hints at the smallest entities being forced down the cash accounting route and restrictions being placed upon the allowances that the smallest entities are able to claim.
I am sure that I am not the only one here getting fed up of all of the constant unrelenting fundamental changes even when some of the proposed changes are not bad ideas.
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Shaun
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Here here. I'm tired of learning something, which not only changes slightly, but changes completely. What is the point of incorporating? I imagine most here who deal with Ltd companies are dealing with the aforementioned within the OTS paper. What happens with frs 102 / 105? And cash accounting for a limited??? They have already changed the rules on dividends in their favour against the one man limiteds. What do they hope to gain? The large and larger companies have investor type shareholders who are privy to all types of special relief schemes - your normal working class man who runs a one man band limited does not. Aside from the limited liability, I'm really not seeing value in incorporating for the small guy anymore.
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
Something that winds me up is, I've not heard anything about any of the upcoming changes - digital tax, quarterly reporting et al - from the British Chambers of commerce, aren't they supposed to have an input? Or at least a voice? All I've heard of them in recent times is the top guy 'resigning' for his EU opinion. Isn't there an institute of directors also? Seemingly some of the best placed, well funded voices in the country - all I'm hearing is silence. The only noise I hear is from accountants - The rate it's going we might as well give our bank details to the treasury and hope for an allowance. I mean look, we are A voice for business, yet they are THE voice. But then is the government informing those at the grass roots of business early enough? Or hiding everything away on its website until implementation?? Grrr
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
I read the other day that it only seems to be the ICPA and the FSB that is doing any kind of campaigning against all these weird proposals. Like you say, they've only just brought in FRS 102 so why tinker with small Ltd Companies again.
Hi Shaun
I presume this is just a proposal at the moment? There is a great need to overhaul and simplify the tax system in this country, is it true to say that it is one of the most complex tax systems in the world? However this stinks too much of not wanting all these one man band limited companies, probably not helped by the heavy push to incorporate over recent years for the tax advantage (virtually removed from April) and then the Directors doing a spongebob to fold the company, leaving HMRC high and dry (1)
(1) Surely the solution for that is to get the Directors to sign a PG when they incororate?
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John
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