The OTS has published a scoping document for its second review of the business lifecycle, which will focus on the tax issues businesses face in the course of their day-to-day operations, and the extent to which administrative complexity may contribute to compliance failures. The first review in April looked mainly at external factors, such as raising capital or changes in ownership.
The focus will be on smaller businesses, both unincorporated and incorporated, with a turnover of £2m or under, or fewer than 10 employees. The review will consider issues including:
accessibility and clarity of guidance and support for setting up a business, including issues arising from the interaction between an individual’s personal and business affairs;
how businesses work out and administer their taxes;
sources of error and unnecessary complexity, and how these could be eased or mitigated;
how the tax system handles unprofitable years or shorter-term cash flow issues (such as loss relief and time-to-pay arrangements) and the extent to which the system helps businesses manage the cash flow demands of paying tax more generally;
the impact of taking on employees;
the impact and any distortive effect of thresholds, such as VAT registration;
issues in relation to relevant tax reliefs such as R&D tax credits;
making overseas sales or purchasing goods or services from abroad for the first time; and
issues arising as the business develops, such as moving to new premises.
The OTS has published a scoping document for its second review of the business lifecycle, which will focus on the tax issues businesses face in the course of their day-to-day operations, and the extent to which administrative complexity may contribute to compliance failures. The first review in April looked mainly at external factors, such as raising capital or changes in ownership.
The focus will be on smaller businesses, both unincorporated and incorporated, with a turnover of £2m or under, or fewer than 10 employees. The review will consider issues including:
accessibility and clarity of guidance and support for setting up a business, including issues arising from the interaction between an individual’s personal and business affairs;
how businesses work out and administer their taxes;
sources of error and unnecessary complexity, and how these could be eased or mitigated;
how the tax system handles unprofitable years or shorter-term cash flow issues (such as loss relief and time-to-pay arrangements) and the extent to which the system helps businesses manage the cash flow demands of paying tax more generally;
the impact of taking on employees;
the impact and any distortive effect of thresholds, such as VAT registration;
issues in relation to relevant tax reliefs such as R&D tax credits;
making overseas sales or purchasing goods or services from abroad for the first time; and
issues arising as the business develops, such as moving to new premises.
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