Small business - the lifeblood of industry or an irritation to government?
I have been reading the latest batch of consultative documents and finally reached the stage of deciding enough is enough. The paper that tipped the scales was the Discussion Document on the Taxation of Foreign Profits (comments on this will follow separately). Ignoring the “use” of English worthy of Big Brother (the original not Channel 4 version!) the content is also unhelpful.
The introduction was, shall I say, interesting – it referred to the Budget 2007 reforms and other proposed measures as “refocusing the tax system’s support for small businesses.” Forgive me, but how does increasing the rate of corporation tax for small companies and decreasing capital allowance rates show support? Is it that the support is being refocused away from small business?
The key message is that the proposals on taxation of foreign company profits and dividends arising therefrom should not include small businesses as their affairs are not sufficiently complex to warrant the changes (emphasis mine).
There are very few small businesses that set up operations outside the UK, the hassle is such that there has to be an overwhelming reason for doing that and for their size that is unlikely to be tax sheltering. Why should the fact that the problems are smaller in quantum, but almost certainly larger in proportion in terms of effort and time, debar them from a simpler regime?
If you run a small business with an offshore arm – I suggest you start lobbying now not to be discriminated against. Your local MP may not have a casting vote but at the very least he should be able to raise your point of view – if enough people do it, who knows, perhaps we could change something. I may be being over-optimistic on that point but I am sure of one thing – if no-one complains the proposals will stand.
It really is up to you – go fight your corner.
