Better Bookkeeping in Bristol Needed as Business Rates Face Reform

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It used to be that consumers had to trudge all the way to brick-and-mortar stores to obtain the goods they needed. These days, however, a growing number of retailers run both physical outlets and online storefronts. Unfortunately, the retail taxation system hasn’t changed as much, which explains why many businesses are still being taxed according to the value of their physical property. According to a BBC article:

A report from the Business, Innovation and Skills Committee says the property tax is no longer fit for purpose, and calls for a “wholesale review”.

The committee’s views echo those of several leading business figures.

Last week, former Tesco boss Sir Terry Leahy described it as an “ancient tax” that “has not worked for years”.

If (or when) such a reform is carried out, businesses will undoubtedly be required to work with Her Majesty’s Revenue and Customs (HMRC) and submit income tax returns, self-assessment receipts, and other documents to comply with the changes. Such a change may prove overwhelming for businesses with inadequate in-house bookkeeping capabilities. These businesses would do well to enlist a reputable Bristol bookkeeping provider such as Wormald and Partners Chartered Accountants.

The demand for change in business taxation is understandable if one looks at the figures from HMRC. The total amount of assessed income tax in the UK was approximately £295 million in the fiscal year 2001-2002.

However, that amount was significantly reduced to £69 million in 2012-2013, which means that fewer income tax receipts are being assessed arguably due to the ongoing trend of businesses that increasingly rely on online sales. The government has also become less lenient when it comes to the issuance of tax credits from 2009 onwards due to policy changes, with income falls at £2,500 being disregarded.

Experienced accountants can best explain how these developments will affect small businesses. Suffice it to say that the clamour for reform will have a huge impact on how operating expenses will be calculated, wages will be paid, and so on.

The government may even be even stricter when it comes to taxation and tax credits, mostly to keep a good eye on companies that don’t pay their dues properly. In any case, this development only goes to show that professionals who can manage payroll in Bristol, as well as in any other county, will continue to perform a vital service in the years to come.

 

(Source: Business rates reform needed, MPs say, BBC, March 4, 2014)

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