Some 91% of mid-sized firms support tax year change

Over nine in 10 (91%) of mid-sized firms would reportedly support a change in the tax year to 31 December.

According to research conducted by BDO, the 91% of responding business leaders claimed now is the time for change to simplify the current tax system.

Currently a proposal that is being pressed by the Office of Tax Simplification, BDO said that the changes would “bring the UK system in line with the global community”.

Paul Falvey, tax partner at BDO, said: “Businesses are hoping that a rethink of the tax system can help them flourish following the challenges of Brexit and Covid-19. Changing the tax year to 31 December is supported by businesses of all sizes and will be particularly helpful for those with international connections.

“Aligning the year-end with more of the international community will help taxpayers to calculate and HMRC to check that the correct amount of tax is paid by those doing business in more than one country.”

The poll of 500 medium-sized businesses also found that 53% of leaders want the super deduction policy to become permanent as a part of additional tax measures to support business growth.

Moreover, half of respondents stated that the government should introduce better R&D tax breaks for all businesses to increase the level of tax incentives in the UK.

Falvey added: “The government has introduced a huge programme of Covid-19 support measures, but as we enjoy a summer with fewer restrictions, we should consider how tax incentives can be improved to inspire UK-based businesses to grow domestically. 

“Making the super deduction policy permanent as well as broadening R&D tax breaks would certainly be a good start to encourage further investment and innovation.”