Javid calls for tax reform as small business deserts Tories

SAJID Javid will today back a radical overhaul of small business taxes amid growing evidence that the Tories are losing the support of entrepreneurs.

The Home Secretary will launch a think-tank report which calls for drastic simplification of the tax system to reduce red tape.

The Centre for Policy Studies study by Nick King, a former special adviser to Mr Javid, includes findings that small company owners are losing faith in the Conservative Party.

Around 62 per cent of small firms’ bosses said the Government is not on their side. And 49 per cent of the Conservative-voting public said their own party does not back small enterprises, while just 24 per cent said it did.

In a significant departure from his normal home affairs brief, Mr Javid will give an introductory speech at the launch of the report today.

He is among potential Conservative leadership candidates who are jockeying for position amid speculation that Theresa May will step down within weeks.

Before the study’s publication, Mr Javid said his party must do more for growing companies and attacked the burden of bureaucracy they face.

‘ Small businesses are the engine of the British economy and the millions of people who run businesses up and down the country deserve the Government’s full support,’ he said.

‘ This report shows how bureaucracy and paperwork are stifling the growth of our small businesses, and offers a series of compelling ideas for how Government can roll back the tide and show that the Conservatives are backing entrepreneurs.’

The CPS report takes aim at the confusing array of taxes imposed on companies.

At present, business owners face separate bills for VAT, business rates, national insurance and corporation tax.

The think-tank suggests that firms with revenues of less than £1million a year should have the option of paying a single ‘simple consolidated tax’ instead.

If the rate of this tax was set at 12.5 per cent it would raise just as much money as the four other taxes but would be much less complicated, the CPS said.

The findings have been endorsed by Andy Street, a former managing director of John Lewis who is now the Tories’ West Midlands mayor. He said: ‘During my decades in industry, I have seen up close the challenges faced by those setting up small businesses – such as getting people with the right skills, accessing the capital they needed to grow, and in particular dealing with the paperwork and administration now required by Government departments and agencies.

‘Nick King’s excellent report is aimed at supporting any and all small businesses, a laudable ambition that should be shared by anyone within local or central Government.

‘I strongly urge the Government to examine the central recommendation, the consolidated tax, which would offer a significant simplification of the tax landscape for small firms.’

‘Dealing with the paperwork’