Business: Taxation

HM Treasury written question – answered on 28th October 2015.

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Photo of Mark Williams Mark Williams Liberal Democrat, Ceredigion

To ask Mr Chancellor of the Exchequer, what support the Government is giving to unincorporated businesses via the taxation system.

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

The government is committed to supporting unincorporated businesses. At Budget 2015, the government announced that it would transform the tax system over the course of this Parliament by introducing digital tax accounts for everyone, removing the need for annual tax returns.

In addition, the government has introduced cash basis accounting so that the smallest businesses can report their income and expenses to HMRC in a simpler way.

Building on recommendations by the Office of Tax Simplification (OTS), the government will consult in autumn 2015 on abolishing Class 2 NICs and reforming Class 4 NICs. This will simplify the NICs system and reduce the administrative burden of NICs for millions of self-employed individuals.

At Summer Budget 2015, the Chancellor announced the Annual Investment Allowance would rise to its highest ever permanent level from January 2016.

The allowance enables businesses, including unincorporated businesses, to write down 100% of all qualifying investment in plant and machinery against its taxable profits up to £200,000, providing a cash flow benefit to companies who invest.

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