The Institute of Directors (IoD) has claimed that the tax system is not keeping up with the growth of self-employment and the digital economy, and has called for Chancellor Philip Hammond to create a new Tax Commission when he presents his Budget on 8 March.
In its Budget submission, the IoD argues that a new Commission should investigate how the tax applied to the self-employed could be brought in line with employees, and how online stores could be taxed fairly in relation to high street shops.
Stephen Martin, Director General of the IoD, said: ‘In the short-term, the government must take action to relieve some of the pressure on the small businesses facing hikes in business rates, and encourage companies to bring forward productivity-boosting investment.
‘But we should also look to the future, launching a new Tax Commission to look at what the growth of self-employment and online business means for the tax system. The goal must be a much more level playing field, which treats both high street and online businesses fairly, and adapts to the growth of the ‘platform economy’, which is leading to an increase in flexible work.’
The IoD has also called on the Chancellor to:
- grant further reliefs from business rates for small businesses occupying properties worth up to £100,000
- increase the Annual Investment Allowance (AIA) cap to £1 million
- reiterate the manifesto pledge for the UK to have the lowest corporation tax rate in the G7
- consult on creating a simpler tax system for small businesses, with a fixed rate for company owners to pay themselves, rather than the different rates of income tax, national insurance, corporation tax and dividend tax
- consult on ‘liberalising’ investment schemes for start-ups.
The Chancellor will present the 2017 Spring Budget on Wednesday 8 March. Make sure you keep an eye on our website for coverage of the key announcements.