Payroll and national insurance top small business tax reforms

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The Independent Online

The Treasury-sponsored body charged with simplifying the tax regime for small businesses has targeted National Insurance (NI), payroll and the constant changes to the system as areas for reform.

The coalition government established the Office of Tax Simplification (OTS) in July. Its director, John Whiting, and his team have spent the subsequent months meeting small businesses across the country.

One problem mentioned repeatedly is the volume of annual changes to the tax code. They mean that firms of fewer than 50 people do not have the resources to keep up to speed.

NI has also proved difficult as parallel Pay-As-You-Earn schemes have different rules. Similarly, payroll departments struggle with the varying frequencies of payment, such as monthly salaries and quarterly VAT.

The OST also wants to revamp the many forms of tax relief. It is asking if all the 1,000 varieties it has found are needed.

Mr Whiting said: "We are publishing an interim report on [case studies of] a dozen or so reliefs and our approaches to what could be done with them before Christmas."