Brexit could help to simplify the British tax system
Business leaders urge the government to improve the British taxation system and they see Brexit as a chance to simplify the fiscal model.
The British tax system in need of an improvement, according to the Institute of Directors, which defines it as “punishingly complex”, a system that hinders the United Kingdom’s growth and harms taxpayers’ trust.
One of the main problems is the fact that it doesn’t distinguish enough between Small-and-medium businesses (SME) and multinationals when it comes to taxation and it doesn’t recognize the impact on job creation SMEs have. All of this would be equally applied to Spanish tax system and others in our immediate environment.
In this sense, they ask the government to implement significant changes in corporate tax by giving SME’s a more favorable treatment, including tax rates that help to recognize these businesses’ efforts in their early years, more depreciation flexibility as well as tax incentives for investment and job creation. They are also asking for fewer administrative constraint, compliance and more flexibility in compliance and audit rules, according to invoice volume.
Their critics to the British tax system do not finish there. A system that they are describing as “daunting”, that is thought as outdated with regard to a modern economy which as a result is slowing the British development down by discouraging needed staff and growth investments.
However, Brexit means for them an opportunity to change that taxation model. They propose to replace the current corporate tax for a tax aimed at Small-and-medium businesses, the ‘SME tax’ that simplifies its taxation in a similar way to what the United States have been doing.
An easier tax system could be more efficient and it would be advantageous to foster trade and business relations both inside and outside of the United Kingdom, it would additionally make it easier for citizens to comply with their taxation duties.
Del Canto Chambers’ Editorial Board