SMEs feel hard done by on tax
2nd September 2016 | News
Almost three-quarters (70 per cent) of small business owners surveyed said in a recent study by FreeAgent that they felt like they were getting a raw deal by the current UK tax system.
SMEs that evolve from working as sole traders to limited companies become liable for UK corporation tax, however many SME owners find it difficult to correctly calculate the levels of tax due.
Again, almost three-quarters (71 per cent) of SME owners surveyed felt the UK tax system benefitted larger companies and corporations more than it did them.
Ed Molyneux, CEO and co-founder, FreeAgent, said that the news of the European Commission’s decision to force Apple to repay £11bn in taxes back to the Irish government will be music to the ears of freelancers and small businesses, giving them belief that the tax system is fair and true.
“We know that corporation tax is often a stumbling block for micro business owners to deal with, especially when they change from being a sole trader to a limited company,” said Molyneux.
“It can be a very confusing thing to understand and many of them have to work very hard to calculate the correct amount to pay, with the shadow of the tax man looming if they get things wrong.
“I’m sure many micro business owners will therefore by happy to see a major multinational company being made to pay their fair share.”
The European Commission ruled that a special scheme to route Apple profits through Ireland was illegal state aid.
Apple CEO, Tim Cook, has branded the Commission’s decision “maddening” and rejected the Brussels audit which found the company’s tax arrangements enabled it to pay a tax rate of as little as 0.005 per cent on all European profits in 2014.