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Mr Adrian Flook, Conservative MP for Taunton told the House during the recent debate, "I know a business woman who considered doubling the number of workers in her firm to two, but when she looked at the large book of complicated regulations she concluded that it was not worth the effort.
"Let us compare and contrast that situation with the Government's attitude to other contractors, namely those affected by IR35. The Government has forced people to work for bigger businesses than themselves with the aim of ensnaring more people in PAYE and other tax arrangements, but on the other side of the red-tape and regulations, the Government's policy of pushing people out of subcontracting is forcing smaller companies to subcontract themselves."
Nigel Griffiths, Parliamentary Under-Secretary of State for the Department of Trade and Industry, however, spoke of the support his Department had offered small businesses since 1997, saying:
"We are all concerned that small businesses and those who want to start up in business should have easy access to high-quality business advice and support in whatever way best suits them and at every stage of their development. I am confident that all Business Link partners will have the needs of small businesses uppermost in their minds."
| "In April 1997, Labour's business manifesto stated: 'We will not impose burdensome regulations on business, because... successful business must keep costs down.' But what do we find? Since 1997, they have added £10 billion, through regulation, to the burdens on business." | | Richard Page MP speaking during the debate |
The concerns raised by Mr Flook and others over the course of the debate led to criticism of the Government's previous election pledges to business...
Richard Page, Conservative MP for South West Hertfordshire, said: "The truth is that the Government put considerable spin on their claim to be the friend of business in general and of small business in particular, but that is belied by the facts. In April 1997, Labour's business manifesto stated: 'We will not impose burdensome regulations on business, because... successful business must keep costs down.'
"But what do we find? Since 1997, the Labour Government has added £10 billion, through regulation, to the burdens on business. Those are not our figures; they come from small business organisations."
The debate in the House comes at a time when the Association of Chartered Certified Accountants is due to release its annual Tax Compliance Survey. The findings will show that the continually rising tax burden, paired with the regulatory burden small businesses already face are,'In danger of making the system unworkable,' according to the ACCA.
'Small businesses are buckling under a tax burden that is spiralling out of control,' the survey says.
The findings show that 96 per cent of the hundreds of small businesses interviewed in the survey are spending more time dealing with tax compliance than they were in April 1997, when self-assessment was first introduced. In 83 per cent of cases the burden has increased significantly over the past year. Where the burden is greater, the majority spend up to 60 per cent more time doing the paperwork.
Chas Roy-Chowdhury, Head of Taxation at the ACCA, said of the survey's findings: "The system has gone mad and somebody needs to do something about it. It is totally unacceptable. There doesn't seem to be any let up."
The Association is actively calling on the Government to do something about the situation.
Mr Roy-Chowdhury said: "There's been an awful lot of talk so far, but not a lot of action."
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Richard Powell, Shout99
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