Press Release
Still the same old tax man
26 June 2006 - WHEN HMRC merged in April 2005, politicians hailed the coming of an uncomplicated and business-friendly force. However, research undertaken for the Tenon Forum, released today, (Thursday, June 29, 2006), shows businesses are still waiting for a glimmer of change. 79 per cent of the UK’s business leaders say they’ve seen no improvement in their relationship with the taxman since the merger.
When Inland Revenue and HM Customs and Excise were merged in April 2005, the department responsible for the collection of tax and the distribution of duties was to be more efficient, effective and to provide better customer service.
The Tenon Forum research shows that the tax man is still out of touch with the needs of Britain’s entrepreneurs. 89 per cent of the UK’s SME owner-mangers say it’s time the tax man consulted them before ploughing on with changes to the tax system.
The bi-annual research, conducted by GfK NOP on Tenon’s behalf, questioned managing directors, financial directors and senior directors of 500 small and medium-sized businesses for analysis by the Tenon Forum, an independent think-tank of entrepreneurs.
One trend that emerged from the research is how complicated Britain’s business leaders find working with the tax man. More than two-thirds of the research’s respondents feel bogged down by technicalities and would like to see the tax man give a clearer picture of tax liabilities, make filing a tax return simpler and provide clearer instructions on how to complete tax forms.
Andrew Hubbard, Director of Tax at Tenon, said:
"A lot of faith has been placed in the ten year plan to reinvigorate the ministry. At present there are some antiquated, and often idiosyncratic, rigidities on business leaders but I’m hopeful that HMRC will make some positive changes to benefit UK businesses in the years to come."
"These rigidities hinder businesses from flourishing either by confusing their cash flow or not recognizing the changed nature of business in the 21st Century. It can be particularly difficult for entrepreneurs who are just starting out. Regular consultation with small business leaders will help ensure the relevance of the changes forecasted."
gagagoogoo.co.uk is an eighteen month-old business selling vanguard children’s clothing. Having spotted a space in the market for reasonably priced, good quality, fun children’s clothing, their business has rocketed since the company’s inception.
As with all new businesses, cash flow was a key concern and, as retailers of children’s clothing, equipment invested in by the company is VAT exempt. Asking for a VAT return as a young company however is not as straightforward as one might expect.
Mark Sinclair, founder of Gagagoogoo.co.uk, said:
"When we asked HMRC if we could go on a monthly return we were informed that we could only do this if we had been in operation for more than twelve months."
"We found it quite bewildering because it’s young companies in particular that need to secure their cash flow. We feel that the tax man really needs to reassess and ensure that the practices they have in place are those which play to the strengths of small businesses. At the end of the day, our success will lead to full coffers for them so they should be making it as easy for us as possible."
Ends.
Notes to Editors
About Tenon
Tenon is a leading provider of accounting and business advice to owner-managed and private businesses.
Tenon provides clients with expertise in Business Services, Tax, Financial Services, Corporate Finance, Recovery, Outsourcing and Forensic Accountancy.
Tenon is a top 10 accounting firm with 1600 staff operating through a network of 30 offices across the UK offering local expertise with the backing of a national plc.
About the Tenon Forum
A regular survey of SMEs is carried out every six months for the Tenon Forum by GfK NOP. These findings, combined with the analysis by an independent think tank of entrepreneurs, form the Tenon Forum report. The Tenon Forum is an independent think tank made up of leading entrepreneurs from the UK’s small and medium sized business community. The Tenon Forum Think Tank meets to analyse issues arising from this research.
About the research
GfK NOP interviewed 500 MDs, FDs and other senior directors of small and medium businesses - firms with between 5 and 499 employees. The survey covers all business sectors across the whole of England, Scotland and Wales and the results have been weighted to provide a representative sample of the British economy.
Contact
For more information, case studies or to arrange an interview, please contact Ali Gee (0207 025 8514, ali@3-monkeys.co.uk) or Joe Winters (0207 025 8514 joe@3-monkeys.co.uk).
