Politicians generally haven’t the first idea when it comes to tax and even less of a clue when it comes to ‘tax simplification’. This week’s Budget didn’t disappoint in that respect.
Small businesses can, from April 2013, choose a more simple method of calculating their profit based on cash – or they can continue to use the ‘accruals’ method. At a stroke we’ve now two methods not one. Potentially two set of books to keep.
I know now what clients will say when I discuss it with them – “Which is better?” – and then they’ll pick the one that means they’ll pay less tax. Small businesses bumbling along without professional advice now will be far more likely to need an accountant. Proper advice for picking the best option for their business will save them money. So much for simple!
PS – The Guardian was reporting this week that 500,000 extra people will need to complete tax returns due to the changes in the Child Benefit system. Tax does seem to be taxing.
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