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Make small business tax less taxing says pressure group

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A pressure group is strongly urging the government to finally remove the big headache posed by confusing and time consuming tax returns.

According to the Forum of Private Business (FPB), through its Chief Executive Nick Goulding, “It’s time to make tax returns less taxing. Our research shows that small business is left spending valuable time completing forms that they find confusing and over-complicated.”

Goulding asserts that it is clear that not enough effort is being done in order to give assistance to small businesses in trying to understand what their role and responsibilities are when it comes to filing tax.

Based on the FPB’s league table of taxing forms, the problematic forms were the P35’s, Self Assessment, VAT returns and the expenses and benefits. These are just some of the areas that the group hopes will be simplified in terms of administration.

Goulding issued the sentiments of the group just as the House of Lords Economic Affairs Sub-Committee started examining the effects for tax administration following the Budget.

Goulding further said that “the impact on our members is twofold, they are already over taxed but they also have to deal with the implications should the complicated nature of their tax administration lead to mistakes.”

The group maintains that the government has been slow in acting on the issue and that it is not doing enough to help small businesses fully understand what they need to do when it comes to filing their taxes.

Some company formation and business solutions professionals are also calling for the simplification of the system as it could spur more businesses to file their taxes earlier and also compel those that are intimidated by the process to actually file their taxes.

Blair cabinet re-shuffle hit by interest group

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The recent decision of Prime Minister Tony Blair to reshuffle his cabinet has been hit by an interest group, saying that the move has once again ignored the welfare of small businesses.

The Forum of Private Business (FPB) has maintained that the decision has been detrimental for businessmen and business owners who own small businesses. They particularly cite the reshuffling of the Department of Trade and Industry but overlooking the fact that the position for Small Firms Minister has remained vacant.

FPB Chief Executive Nick Goulding said that he thinks what has happened is another case illustrating the negligence of the interests of small businesses. He maintained that since the post was scrapped by Prime Minister Blair, the needs of small enterprises have gone down the pecking order.

The Small Firms Minister’s duties has been shared out to the Minister of State for Industry and Regions Alan Michaels and Parliamentary Under Secretary Barry Gardener and this is not something that small businesses agree with. In the latest round of ministerial reshuffling the positions have been removed.

According to members of the FPB, small businesses should have ministerial representation at the Cabinet level. Based on a survey conducted on FPB members, 81 per cent of respondents voted in favour of having a Small Firms Minister in the Cabinet.

Goulding shared that “Government is increasingly distant from small firms, whilst large business seems to have direct access to decision makers.”

company formation and business solutions professionals are urging the government to also listen to these interest groups in order to determine if their claims can actually help small businesses in the country.

Business confidence rises for second half of 2006

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According to the accountants and business advisers at BDO Stoy Hayward, UK economic growth is expected to grow stronger in the second half of 2006.

The report, which was included in the most recent BDO Business Trends report, shows that a there is an increase in business confidence both in the short-term and the long-term. There is an expected growth of 3.4 per cent for the third quarter of 2006. This is compared to the 2.4 per cent posted in the last quarter of 2005.

These positive numbers are likely to give tremendous benefit to the
UK economy especially later this year. Some of the other factors that have contributed to this upswing are the rebound in consumer spending, economic recovery in Europe and the fast rising value in the stock market.

The new report also showed that the expectations about UK inflation levels are actually falling. Inflation is being pegged to be at 2.2 per cent by the third quarter of 2006. Because of the expected strong showing of the economy and with inflation foreseen to go beyond the two per cent target of the Bank of England, it is most likely that interest rates will not be slashed this year – much to the disappointment of people who are clamoring for an interest rate cut.

Company formation and business solutions professionals are welcoming this developing trend, saying that the positive economic numbers will surely spur growth and might even entice people to start their own investments and businesses as a way of taking advantage of the conducive environment for business.

UK behind in data protection

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According to a survey conducted by the Department of Trade and Industry among 1,000 respondents, UK companies are falling short in terms of protecting data. The DTI has thus expressed concern about this, in light of the increasing level of e-commerce activities and business conducted online. The risk of client data and proprietary company information being stolen continues to be very high.

According to the study, most large companies take an active role in securing data and customer information that it has. However, most smaller companies do not have such a proactive stance on network and data protection.

The most vulnerable, in this case, would be the companies that accept financial transactions online. Information such as credit card numbers and client contact information and addresses are potential targets by hackers. Among the companies that accepted online financial transactions, more than one third did not encrypt their data transmissions and databases. And among companies that use voice-over-internet protocol for voice calls, half did not consider possible security risks.

UK economy improving

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According to the British Chambers of Commerce (BCC), the UK’s economy is gradually recovering from a slowdown, although it is still in a precarious position as any shock is likely to hamper growth further. The BCC considers this a “temporary” recovery, as it must be backed by improvements in export and employment. In this regard, the BCC is concerned about the rise in unemployment nationwide, as reported earlier this week.

The recovery is said to have stemmed mainly from the manufacturing sector, but the BCC sees this as unsustainable, based on the sector’s past performance. Thus, any development should be supported by sustained growth in the services and export sectors. The BCC also said the Bank of England’s monetary policy committee should strive to maintain interest rate flexibility to attract more new companies starting up and engaging in new business. Otherwise, the economy runs the risk of losing its recovery streak.