A report published on 16 April 2018 outlines several areas where the taxation of businesses could be simplified and reliefs made more accessible.
While various reliefs available to businesses in the UK have encouraged entrepreneurship, the report claimed many SMEs either misunderstand or are unaware of them.
Such reliefs include the Seed Enterprise Investment Scheme, the Enterprise Investment Scheme and Venture Capital Trusts.
The report also looked at how entrepreneurs’ relief, capital gains tax gift relief and inheritance tax reliefs interact for business assets, highlighting the confusion this can cause.
Overall, the report examined the taxation of businesses at 5 key points:
- starting a business
- incorporating a business
- seeking finance
- business succession
- disposal of a business
Paul Morton, tax director at the OTS, said:
This paper takes a significant first step towards meeting the pressing need to undertake a detailed review of the tax system as it operates across the business life-cycle.
It is aimed at helping the businesses that are the lifeblood of the UK economy to maximise their opportunities and to make the system clear and simple to understand and use.