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UK tax system ‘fundamentally unfair’ to small businesses

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A survey of over 1,000 UK firms by the British Chambers of Commerce (BCC) has found 67% believing that HMRC does not apply the tax rules fairly across all sizes of business. This view was most widely held among micro firms (70%) and shared by 59% of medium and large businesses.

SMEs made up 96% of the respondents, with 68% in the service sector and 32% in manufacturing.

There was also the perception (shared by 67% of micro firms and 59% of medium and large businesses) that HMRC does not apply the rules fairly regardless of where a company is domiciled.

Many small businesses expressed the view that HMRC underestimated the time and money required to keep pace with regulatory burdens and the complexities of the system, with 49% believing HMRC should provide more support to help them be compliant.

The BCC is calling on HMRC to match the level of investment in tax avoidance work with funding for support and advice to businesses.

Suren Thiru, head of economics at the BCC, said: ‘When it comes to compliance there is a tendency for HMRC to see smaller businesses as low hanging fruit and as a consequence they feel under the constant threat of being called out for getting things wrong in a tax system that has grown ever more complex’.

‘There is also widespread disappointment over the escalating burden of up-front taxes and costs of doing business in the UK, particularly at this time of heightened uncertainty’, Thiru added.

Issue: 1440
Categories: News