Owner-managers of growing businesses are calling on the next government to simplify taxation.

Owner-managers of small and medium-sized enterprises (SMEs) are calling on the next government to simplify taxation.

Some 71.7 per cent of 2,000 SME directors polled by software company Sage say the complexity of HMRC rules is a barrier to new businesses starting up, while 76.3 per cent felt they were missing out on tax breaks because the system was too difficult to navigate.

Victoria Pooley, MD of direct marketing company The Data Partnership, says, ‘There are so many different thresholds and bits of red tape to wade through. As a company grows, especially with offshore call centres, tax becomes a massive headache.’

The Sage survey finds that given the chance to make a single change to the tax system, 34.5 per cent of SMEs would choose to make it simpler, while the second biggest contingent, 25.9 per cent, would like a future administration to freeze VAT at 17.5 per cent. Only 5.8 per cent wanted to see the 50p rate of income tax for the highest earners scrapped.

Andrew Hubbard, a tax specialist at accountancy firm RSM Tenon, says, ‘Fundamentally, business owners want to be left alone. Often a change is introduced to make things simpler but it ends up creating more cost and problems.’

Jayne Archbold, MD of Sage’s accountants division, states, ‘At times of economic uncertainty, knowing what tax benefits and breaks your firm is entitled to can make the difference between success and failure.’