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OTS publishes report recommending simplifications to corporate taxation

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07 Jul 2017

The Office of Tax Simplification (OTS) has published a report which makes a number of “practical recommendations” aimed at simplifying the corporation tax system from both the perspective of smaller and larger companies.

The report, which responds to calls from businesses to make the calculation of corporation tax simpler, specifically looks at:

  • Simpler tax for smaller companies.
  • Aligning the tax rules more closely with accounting rules.
  • Simplifying tax relief for capital investment.
  • Specific issues affecting the largest companies.

For smaller companies the report recommends:

  • That accounting profit prepared under FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime be used as the taxable profit without any adjustments.
  • For those smaller companies not able to apply FRS 105, the tax calculation should be simplified to require “only a minimum number of essential adjustments to accounting profit”.

For larger companies the report recommends improvements in a number of technical areas in the context of promoting stability and certainty in the corporation tax system.

The press release and full report are available on the OTS website.

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