Liberal Democrats in Business

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Small Businesses Used As Unpaid Tax Collectors - Cotter

6.49.49pm GMT Mon 9th Feb 2004

Brian Cotter MP, Liberal Democrat Shadow Small Business Minister

The Liberal Democrats have said that small firms should be compensated for the regulatory work they carry out on behalf of the Government following business concerns about increasing costs of compliance.

Commenting in response to evidence given by the Institute of Payroll and Pensions Management to the Treasury Select Committee, Brian Cotter MP, Liberal Democrat Small Business Spokesman, said: "Small firms are effectively acting as unpaid tax collectors on behalf of the Government."

"They are used to administer various tax credits and student loan repayments through the payroll."

"The burden of administration rests more heavily on small businesses. They spend about £288 a year on compliance for each of their employees, compared to just £5 for a larger company."

"The Liberal Democrats would cut down on much of the repetitive and unnecessary administration currently required by the Inland Revenue, and reduce the burden of red tape by allowing small businesses to claim a tax allowance for regulatory compliance."

ENDS

Notes to Editors

  • The Treasury Select Committee is currently investigating the administrative costs of tax compliance.

  • The Institute of Payroll and Pensions Management gave evidence to the Treasury Select Committee warning that firms' payrolls are becoming too much of a 'soft target' for the administration of Government measures.

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