Yesterday, the British Chambers of Commerce (BCC) launched a "paperwork protest" campaign in the attempt to extract a commitment from the government to simplify the tax system and reduce bureaucratic red tape.
Through the campaign, "Making Tax Simple", the BCC intends to highlight the unneccessary official tax and payroll procedures that burden UK small and medium sized (SME) employers. Currently, SMEs are faced with growing time and cost pressures from new obligations which, the BCC argues, are forcing them to act as 'unpaid tax collectors and administrative agents of the State.'
Using the results of a web-based questionnaire, the BCC will advise the government with specific recommendations to reduce the overall burden of administering the tax system. The questionnaire invites firms to explain the frustration they experience when attempting to wade through the tax system, from paperwork and calculations to benefits in kind, investment incentives and complex payroll procedures. Deputy director-general of the BCC, Dr Ian Peters, explains 'with payroll calculations and the wider tax system increasing in complexity year after year these burdens are hitting new business creation and smaller firms' potential for productivity and job growth.'
The BCC will suggest that the nation's political parties set up a business-led task force to research methods that will make the tax system easier to comply with. In fact, this suggestion has the backing of the Trade and Industry Select Committee and is an initiative already implemented by other countries such as Canada and Australia.
"Making Tax Simple" highlights research published by the Inland Revenue which demonstrates that the cost of collecting income tax and National Insurance, paying statutory sick and maternity pay via payrolls, can be as much as £279 per year per employee for firms with less than five staff. And this was before the working families tax credit and collection of student loan repayment schemes were brought in, thus adding more time and cost burdens on small- and medium-sized employers.
As Dr Ian Peters says, the government must sit up and take notice - 'successive governments have time and again ignored the impact on business competitiveness of an overly complex tax system, and this campaign is about saying enough is enough. If government is serious about reducing the burden on employers, the answer lies in radical reform.'
The British Chamber of Commerce's online questionnaire can be found at http://www.britishchambers.org.uk/mts/
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