Small firms deserve tax ‘breathing space’
19 November 2008 Small businesses adversely affected by the severe economic downturn should be given time to pay the taxes they owe, a tax organisation has argued. The Chartered Institute of Taxation (CIOT) has said that the “exceptional” economic circumstances have imposed additional financial difficulties on small firms that should be taken into account by HM Revenue and Customs. Peter Fanning, the CIOT's chief executive, commented: “What we have seen in the last month has been quite exceptional. No small business, even in a worst case scenario, would have planned for such an event. There are various things that can be done to help businesses, such as wider publicity of HMRC’s ‘Time to Pay’ facilities, and allowing them to pay the tax they owe at a time when they are able.” The CIOT also urged the government to think carefully about other tax issues affecting small enterprises, particularly the question of income shifting. Mr Fanning added: “The CIOT welcomes the fact that both the Department of Business, Enterprise and Regulatory Reform and HMRC are looking at how they can help small businesses. Given that the original income shifting proposals were aimed at only on a tiny percentage of owner-managed businesses in the UK but would impact on a large proportion of them, the administrative burden would far outweigh the limited tax take.”
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