Small talk: Here is a sensible reform that wouldn't cost a penny in lost tax

Just nine days to go the Budget and it still isn't clear whether George Osborne has persuaded the banks to buy into the credit easing scheme he once thought promised so much. Well, here's a suggestion for the Chancellor: rather than worrying about an initiative whose benefits now look, at best, marginal, why not use this Budget to offer small businesses something they all want: tax reform.

The Office of Tax Simplification (OTS), an independent body set up by the Government last year under the leadership of the former PricewaterhouseCoopers partner John Whiting, has published a blueprint for exactly that. And while there are many small businesses who complain about lack of access to credit, the number that waste valuable time on excessively onerous tax administration is far higher.

The OTS's most eye-catching proposal is that 2 million businesses with annual turnovers of less than £30,000 ought to be exempted from the requirement that they file full accounts with the sort of detail expected from much larger companies. Instead they should be able to operate with cash accounts – much like personal taxpayers – that only require them to keep records of receipts and expenses.

It's a sensible recommendation that would not cost a single penny in lost tax. So much so that there is a case for a significantly higher threshold – the £73,000 VAT registration limit might be a convenient level at which to peg the requirement.

What it would need, however, is a change in culture at HM Revenue & Customs, which often seems to work on the basis that all small business owners are trying to pull a fast one. The OTS recognises as much – calling for HMRC to be less aggressive with smaller companies – though it's a pity the office itself hasn't been more supportive too. It's backed away from pushing for the abolition of the notorious IR35 regime, for example, which causes contractors so many problems.

More happily, the OTS is now suggesting a reform that would help many thousands of small companies disincorporate, closing the book on one of those sorry stories all too common thanks to Britain's constant meddling with tax regulation. Tens of thousands of businesses incorporated under the previous government, when tax breaks made it advantageous to do so. The tax breaks were eventually abolished and it would make sense for many businesses to disincorporate, in order to escape the more onerous reporting requirements they are currently subject to. But doing so would force many businesses to crystallise substantial capital gains – and a nasty tax bill. The OTS suggests changing the rules to prevent that.

Will the Chancellor respond to the OTS's charter for tax simplification? Well, logic suggests Mr Osborne should do so – most of what is suggested implies no loss of tax revenue for the Treasury and is a neat fit for a government that has promised to cut red tape. On the other hand, none of these measures will make the sort of headlines that credit easing promises to deliver. They will require the Chancellor to follow head rather than heart.

Sylvan set for £60m IPO

Sylvan Energy is due to unveil details of its plans to list on Aim today. With a projected market cap of $100m (£60m), the company will be the biggest IPO of the year so far. Sylvan is a Pennsylvania-based onshore oil and gas exploration and production company, with assets in the east and south of the US, several of which have surprised analysts with better-than-expected early development results.

Chinese rare earths miner comes to Aim

Commodities is still one of the few growth industries for the Aim market (as is it is for the main market in London), and two companies in the sector are due to be announced today.

Rare Earths Global will announce its intention to list this morning. The Chinese company wants $50m from investors looking for exposure to this increasingly valuable niche of the mining market. It describes itself as a "fully integrated rare earths" solution, meaning that it extracts, separates, refines and trades the minerals used in technology such as mobile phones. The company has export licences from the Chinese government, which has increasingly restricted trade in rare earths, but also sells to the rising number of global manufacturers setting up shop in the country – Apple, for example.

Bushveld Minerals will also say today that it is ready for an Aim listing and is seeking £5m for its mineral exploration projects in South Africa. The company has assets in the Bushveld region, which hold a fair chunk of the worlds iron ore and titanium reserves.

Green economy can be next great growth story for West: Jonathan Short, managing director, ECO Plastics

In the space of six years, we've built the largest plastic bottle recycling plant in the UK – we employed 30 people in 2006 and today we employ 160.

We're a manufacturing business, but we operate within the green economy, which can be the next great growth story for Western economies, as long as we are careful not to export the expertise we have developed.

There is more that local and national government can do to encourage our business: what we've started to see over the past couple of years is a deterioration in the quality of the plastics we receive – there's much more detritus coming in with it.

That's not the fault of the consumer – consumers really have embraced recycling – but the problem is that people have been getting mixed messages from local authorities about how and what to recycle. We could double the number of plastic bottles collected in the UK with more effective messaging to consumers.

Suggested Topics
News
peopleHowards' Way actress, and former mistress of Jeffrey Archer, was 60
Sport
Romelu Lukaku puts pen to paper
sport
News
Robyn Lawley
people
Arts and Entertainment
Unhappy days: Resistance spy turned Nobel prize winner Samuel Beckett
books
PROMOTED VIDEO
News
people
Life and Style
Troy Baker and Ashley Johnson voice the show’s heroes
gamingOnce stilted and melodramatic, Hollywood is giving acting in video games a makeover
News
i100
News
people
Extras
indybest
Life and Style
Phones will be able to monitor your health, from blood pressure to heart rate, and even book a doctor’s appointment for you
techCould our smartphones soon be diagnosing diseases via Health Kit and Google Fit?
Travel
Ryan taming: the Celtic Tiger carrier has been trying to improve its image
travelRyanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Usain Bolt confirms he will run in both the heats and the finals of the men's relay at the Commonwealth Games
commonwealth games
Life and Style
Slim pickings: Spanx premium denim collection
fashionBillionaire founder of Spanx launches range of jeans that offers 'thigh-trimming construction'
News
Sabina Altynbekova has said she wants to be famous for playing volleyball, not her looks
people
News
i100
Life and Style
tech'World's first man-made leaves' could use photosynthesis to help astronauts breathe
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

BA/PM,EMIR/Dodd-Frank,London,£450-650P/D

£450 - £650 per day + competitive: Orgtel: My client, a leading bank, is curre...

Senior Analyst - ALM Data - Banking - Halifax

£350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...

Java developer - Banking - London - Up to £600/day

£500 - £600 per day: Orgtel: Java developer - Banking - London - Up to £600/d...

Day In a Page

Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end
UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

UCI Mountain Bike World Cup

Downhill all the way to the top for the Atherton siblings
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star