The OTS Small Business Tax Review: A Positive Start to Simplify the UK Tax System

Abstract

The interim report of Small Business Tax Review was delivered by the Office of Tax Simplification in March 2011. The reform of the personal service company rules (IR35) and the integration of income tax and National Insurance are now at the top of the tax simplification agenda, with a special focus on benefits on small business. The simplification of the UK tax system cannot be achieved overnight and the barriers may seem insurmountable. Nevertheless, provided the UK government is sufficiently determined, the goal is achievable, albeit on a step by step basis. Based on the OTS interim report, this piece discusses the need to reform the current income tax and National Insurance system, with particular reference to the personal service company rules (IR35).

Keywords: Small Business Taxation, UK, IR35, Tax Simplification