Tax and tax avoidance: Osborne’s attack on small businesses

The Madness of George: Mr Osborne’s latest attack is on the smaller businesses and sole traders who prop up the UK’s economy. Does he understand nothing at all about his job?

It seems George Osborne wants to focus his next attack on the small businesses of the UK – the firms that form the vast majority of the nation’s business base.

Lunacy, you might say. Craziness. You may ask why he would want to do such a thing, and what evidence I have to suggest it.

Well, let’s start with the letters going out to 1,500 people suspected of taking part in a tax avoidance scheme – which is currently legal, although the BBC report suggests its legality will be challenged. These people are suspected of depriving the Treasury of £10 billion per year.

The National Audit Office said HM Revenue and Customs was dealing with a backlog of 41,000 cases of aggressive tax avoidance involving individuals and small companies.

That’s all very interesting. Why not write to the shareholders of the Thames, Anglian and Yorkshire Water companies, whose tax avoidance history received an airing in the press and on this blog very recently? The evidence suggested they were removing a combined total of £1 billion per year to tax havens offshore and, to me, it seems far simpler to write letters to three companies, and investigate them, than to 150 individuals.

Could it be because the water companies were exploiting tax loopholes that had been created especially for them, and other large businesses, by Mr Osborne himself in 2011?

Could it be that shareholders in those large concerns might also be donating money to the Conservative Party? Attacking them would be the political equivalent of self-harming, if that were the case.

So the focus of attack goes down to the smaller business or sole trader.

Were you aware that Mr Osborne is considering changing road tax rules, to introduce a new two-tier system?

It seems he wants to create a class system for the roads, in which second-class citizens will be licensed to use the smaller roads, while first-class citizens will be able to pay for the extra tax disc, entitling them to use the motorways.

I see that as an attack – on the private driver, yes, but also on the small businessperson. Think about it. Small businesses can spend a lot of time on the roads, zipping around between jobs. An extra expense on the balance sheet could be the difference between being a profitable concern and going under.

At a time when the UK is relying on small and start-up businesses to re-ignite the economy, this is nothing short of madness.

But then, when’s the last time anyone ever suggested George Osborne had sense?

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  1. Smiling Carcass November 24, 2012 at 4:17 pm - Reply

    Small businesses are often started by some working class entrepreneur giving himself a leg-up; working class are often unwaged who are lucky enough to find employment; unwaged are scum of the earth, and the connection is too tangible.

  2. Michael Natkanski November 24, 2012 at 10:29 pm - Reply

    There is an explicit and deliberate attack on small business, in the form of an outrageous requirement that traders cannot carry a negative balance over the end of the month : it is Item 181 on page 31 of the ‘Explanatory Memorandum for the Social Security Advisory Committee’, for the meeting of the committee on Wednesday 13th June, and it says

    “Claimants will not be permitted to carry forward negative balances of income: if
    the net income for the assessment period is a negative amount, this would be treated as zero for the purposes of the award calculation and the next assessment period’s income would be based solely on the income for that period.”

    I doubt there is a business anywhere in the land that balances the account and shows a profit every month. Perhaps it should be seen in the context of the fascist Lord Fraud’s recent insults in the press about small businesses that only make a few hundred pounds….

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