Report calls for tax help to small firms

Date: 17th November 2009

UK small firms, including sole traders, should be given help on taxation according to a new report.

The study, from the Business & IP Centre at the British Library, decided that tax breaks should be offered for the firms' first two years of trading, the BBC reported.

This help would be added to existing government assistance to smaller companies, including the Business Payment Support Service which allows a delay to tax payments for firms struggling in the recession.

VAT has also been reduced from 17.5 per cent to 15 per cent - although this temporary reduction runs out in January 2010.

In the report, the Business & IP Centre also suggested that the patents process should be streamlined so that start-ups can register their innovations and protect themselves against imitation more quickly.

Businessman Doug Richard, who contributed to the study, told the broadcaster: "If the government is serious about encouraging enterprise in the UK, then they need to avoid gimmicks like the VAT cut, and offer start-ups a genuine exemption from tax until they get their businesses up and running."

Posted by Anthony Burns