The Office of Tax Simplification has published its review of small company taxation.
The intention of the review is to highlight areas where tax can be made simpler for companies with fewer than 10 employees.
The proposals include cash accounting for small companies; liability protection for sole traders to remove some of the need for incorporation; and taxation of shareholders as an alternative to corporation tax for certain business types.
In addition, the review considers aspects of the UK’s tax system which create particular practical difficulties for small businesses, such as arbitrary differences in filing and payment dates for VAT, PAYE, corporation tax and Companies House filing requirements. It includes innovative suggestions for a turnover basis or cash basis for taxation.
The OTS review is available to view here.