OTS summer budget news for the UK SME

OTS summer budget news for the UK SMEThe government announced in its Summer Budget that the Office of Tax Simplification is due to review the closer alliance of National Insurance and income tax.

On the government agenda this autumn will be consultation on reforming Class 4 NICs, abolishing Class 2 NICs and simplifying NICs for the self-employed.

Taxation of SMEs will also be reviewed, with a focus on deformations between personal and business tax systems and the complexities that are faced by many small businesses in the UK.

The OTS has been in place since 2010 and will now remain on as a permanent office of HM Treasury.

It is there to advise the government on how to develop and deliver a simpler tax system, including compliance issues and provide independent advice on tax complexity issues.

Financial secretary to the Treasury, David Gauke, outlined the plan in a letter to the leaders of the OTS:

“The first is a closer review of alignment of income tax and national Insurance contributions. This is an area often cited as an area of complexity for taxpayers.

“I would like the OTS to look at what the impacts, costs and benefits of closer alignment would be and to set out what the necessary steps would be to achieve closer alignment. This is a new type of review for the OTS, focusing on the issues and impacts rather than on making specific recommendations.

“The second is a review of the taxation of small companies, focusing on the distortions between the personal and business tax systems. This builds on your previous review of small business tax which focused on unincorporated small businesses.”

OTS summer budget news for the UK SME

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