Small Business Taxation
DIMENSIONS OF TAX DESIGN: THE MIRRLEES REVIEW, Stuart Adam, Stephen Bond, Robert Chote, Paul Johnson and Gareth Myles, eds., Oxford University Press, June 2010
73 Pages Posted: 8 Apr 2011
Date Written: June 6, 2010
This paper, commissioned by the Institute for Fiscal Studies for the Mirrlees Review on Reforming the Tax System for the 21st Century, discusses the taxation of small, owner-managed businesses. It focuses on the difficulties created by taxing different legal forms of business-employees, the self-employed, unincorporated traders, partnerships and incorporated firms- in different ways. The chapter argues that the aim should be to align effective tax rates (including national insurance (social security) contributions) for these groups after taking into account capital investment and suggests ways of achieving this. In addition the authors reject the case for blanket tax incentives for small businesses, although they accept the case for specific reliefs, if they can be targeted effectively, where there is a market failure or to assist with compliance costs.
Keywords: taxation, small owner-managed businesses, effective tax rates
Suggested Citation: Suggested Citation