SMEs deem tax system as ‘unfair’

A poll carried out by the Forum of Private Business (FPB) has found that more than two thirds of owners of small and medium-sized enterprises (SMEs) believe the tax burden placed on them is unfair.

According to the poll, more than half think the tax system favours large companies.

The research has been released just ahead of the 31 January deadline submission of self-assessment forms on the HM Revenue and Customs website.

It was compiled by canvassing SME owners through the FPB’s Tax and Budget Member Panel.

Some 43 per cent of respondents said that ‘fairness’ should be the main priority for the tax system. The next priority was ‘simplicity’, which was supported by one in five smaller businesses.

In addition, 13 per cent said they wanted to see the tax system reformed to make Britain more competitive internationally. In more general terms, 45 per cent of respondents said that their tax burden was a ‘very serious’ issue for their companies.

‘Our members believe that they are bearing an unfair tax burden because of the moderate sizes of their businesses,’ said FPB spokesman Phil McCabe.

‘The complexity of the British tax system is not only time consuming and frustrating, it also puts small firms at an instant disadvantage. Big companies have the expertise and resources to understand the system and minimise their tax burden. For most of our members, hiring an outside tax consultant represents a significant cost few can afford, especially in the midst of a recession.’

‘Whichever party comes to power at the general election, we would like to see them lay the foundations of a bold new tax environment where small firms are rewarded, rather than unfairly penalised, for the huge contribution they make to the British economy,’ he added.