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CIOT hails new income shifting EDM

26 March 2008
Categories: News , Income Tax
A great opportunity for the Government, says Ellerby

The latest Early Day Motion (EDM) on income shifting has been welcomed by the CIOT as a 'great opportunity' for the Government.

EDM 1195 was tabled in the Commons by a group of ministers led by David Drew, Labour and Co-operative Party MP for Stroud.

It follows an earlier, pre-Budget motion (no. 714) highlighting concerns that proposed legislation 'will make it impossible for jointly-owned businesses to self-assess their tax liability with any certainty'.

The new EDM follows the announcement in this year's Budget that plans for incoming shifting reforms will be postponed until the Finance Act 2009, following further consultation.

It 'calls on HM Treasury and other affected departments to use the additional year that they have allowed themselves for consultation on this issue to undertake a thorough review of more appropriate means of providing smaller enterprises with a suitable legal entity… that will simultaneously reduce the… burdens on smaller enterprises, so freeing them to generate wealth and employment… whilst ensuring that they can with minimum effort comply with the taxation and other requirements… in a way that minimises risk of tax avoidance, creates a level playing field in which all in the sector can compete fairly and ensures that the right person is taxed on the reward they have earned at the right time...'.

When the first EDM was tabled by MP Robert Smith, the CIOT proclaimed that it had long been of the view that fundamental reform to the structure of small business taxation was necessary.  

Prior to the motion earlier this year, the institute publicly criticised the Government's income shifting consultation.

CIOT president Rob Ellerby attacked 'proposals to deal with this perceived problem in isolation, rather than through a wholesale review of the taxation of small businesses'.
 
In response to the latest EDM, Mr Ellerby remarked: 'The MPs who tabled this motion are right to say that by extending the process for another year, the Government has given itself a great opportunity to think through the issue more fundamentally with a view to coming to a better answer'.

 

Sections - income tax and NI

Categories: News , Income Tax
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