Tax Hell for Company Formation and SME’s

The Government’s well worn marketing slogan, ‘Tax Needn’t be Taxing’, was undermined last week, by a survey which suggested that the majority of SME’s and recent company formation owners, feel that the current tax system in the UK unfairly favours big business.

According to the report, conducted by management consultancy firm ‘Talk Business’, of the five thousand small businesses surveyed, over 70% felt the complex nature of the tax system was unfair to small businesses, while over 50% felt that bigger businesses have the resources available to get the most out of the system – unlike the SME sector.

Katherine Johnson, founder of online clothing company ‘Red’ comments; “The bureaucracy and red tape you have to go through just to get the allowances you are entitled to are ridiculous. For many small businesses this puts them off applying for them, while companies who can afford to employ accountants and tax advisors obviously have the advantage.”

James Cotton, member of the for IFS comments: ‘The fact is that larger companies can afford to hire a team of tax experts to ensure the amount of tax they pay is minimal. For many small businesses, especially in the current economic climate, that is just not possible. The government should reward the SME and company formation sector for the significant role they play in the growth of the UK’ economy.”