In preparation for the merger of the Inland Revenue and Customs & Excise in to the new HM Customs and Excise, the Government is asking small businesses, their intermediaries (such as accountants and payroll providers), business advisors and representative bodies for their views on how the new department can best address their needs.

The consultation paper is entitled Working towards a new relationship: a consultation on priorities for reducing the administrative burdens of the tax system on small business. It describes the measures that the new department will introduce immediately, including

• moving payment of tax credits away from employers between November 2005 and April 2006
  
  
• cutting the size of the tax return for 500,000 of the smallest businesses
  
  
• publishing a redesigned form 42 to help newly incorporated companies
  
  
• reducing the time spent dealing with inspections, with trials on joining up inspections of PAYE and VAT
  
  
• payment of VAT by direct debit
  
  
• introducing a programme to assess the impact on small business of significant operational changes, including the publishing a full assessment of the impact of changes to forms and business practices.

The consultation document seeks views from small businesses and their advisors on the steps that the new department is planning to take to implement the Government's objectives of reducing administrative burdens and building a better relationship between the tax authorities and small businesses. Readers may be interesting in commenting on the following consultation questions:

1. Which forms give rise to the greatest burdens for businesses, and why? How might they be improved?
   
   
2. Do the existing on-line services offered by Revenue or Customs meet small businesses' needs? What are the main areas for improvement that would encourage more small businesses and their advisors to file returns electronically?
   
   
3. Should the department be doing more to offer modern and flexible payment options for small businesses?
   
   
4. Is the current balance right between providing a level playing field for all, and providing payment flexibilities for businesses?
   
   
5. What might enhance the existing range of VAT simplification schemes available to small businesses?
   
   
6. To what extent do different payment dates for different taxes give rise to problems for businesses?
   
   
7. Would businesses prefer to have one visit to inspect all business records for all taxes, or separate visits for different taxes?
   
   
8. What other steps might be taken to reduce the burdens on business that result from inspections and enquiries?
   
   
9. How high a priority is delivering Whole Customer View to small businesses and their advisers?
   
   
10. How do small businesses and intermediaries prefer to obtain the information they need?
    
    
11. If the department needs to prioritise early action to improve channels of communication, should it focus on a better website, better designed leaflets, or improved phone contact services?
    
    
12. Is having a single view of clients' accounts with HMRC be a priority service for intermediaries?
    
    
13. What can the government do to further reduce the costs of using intermediaries and to ensure that those savings are passed through to small business?
    
    
14. What drives the cost of administering the Government's payroll reporting requirements? What are the main implications for employers' resourcing that come with these requirements?
    
    
15. What are the benefits of using intermediaries to deal with payroll? Do these benefits to business always outweigh the cost? Are there best practice examples available that might help small employers attain the optimum cost/benefit balance?
    
    
16. What more can be done to encourage small employers to make greater use of intermediaries to administer payroll or aspects of payroll?
    
    
17. To what extent do businesses artificially constrain their growth as a result of the tasks associated with taking on their first employee? What could be done within the existing tax and benefits system to minimise this?
    
    
18. How can we best encourage small employers to take greater advantages of the benefits of technology? Are there best practice examples available that might help small employers achieve the optimum cost/benefit balance?

Responses and comments on these issues should be sent to the address shown in the consultation document by 30 June 2005.

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...back to 24 March 2005


Source:
Small Business
Small Business Summary