The House of Lords will publish a report next week detailing its views on how recent tax changes will affect entrepreneurship.
The Economic Affairs Sub Committee has been analysing certain aspects of the recent Finance Bill, and the impact on enterprise and the UK’s economic competitiveness.
Last year’s Finance Bill, which included an increase in the small firms’ corporate tax rate, received a hammering from the Lords, for going against the government’s aim of simplifying the tax regime.
Lord Wakeham, chairman of the House of Lords Economic Affairs Committee, noted:
“The government must go further and move faster in simplifying the corporate tax regime. While there are some positive steps in the 2007 Finance Bill we are concerned that Britain is still losing international competitiveness.
“It is vital for small and large business alike that the tax system is clear, simple and not liable to rapid change. We are therefore concerned that the rate of corporation tax for small companies has changed so often in recent years.”
Areas coming under scrutiny this year will include the abolition of capital gains tax taper relief, in favour of a flat rate of 18%, residence and non-domicile tax changes and measures to encourage entrepreneurship.
The government has already come under fire from entrepreneurs and business lobby groups for implementing unpopular changes laid out in this year’s Finance Bill so soon after they were announced and without proper consultation on the impact they would have on the UK’s competitiveness.
The chancellor has also faced criticism for throwing in last-minute, ill-thought-out concessions to win back support from the entrepreneurial community, which further complicate the tax system.
© Crimson Business Ltd. 2008
