Home > Uncategorized > Turnover tax. Good or bad?

Turnover tax. Good or bad?

London Mayoral Election

Mooted by Ken Livingstone and given consideration by Milliband, a tax on business turnover rather than profits was considered by Labour before being quickly ditched by Ed Balls.

And rightly so. Yes many of us do believe that international tax avoidance (or “Planning”) is past the stage of any level of acceptability but this is simply not the right solution

See this stinging piece in the ever excellent Real Business magazine  http://realbusiness.co.uk/article/25477-a-tax-on-turnovers-would-be-bad-for-business

Many businesses operate on pretty small margins out of necessity. A retail or trading company will have a substantial turnover compared with manufacturing or consultancy. They would be hammered. 

But for me the one aspect that has not been highlighted is the effect on the SME market. I doubt whether Livingstone cares for one minute about enterprise and the suspicion remains that Milliband is not exactly “business friendly”either but the simple fact is that businesses can develop for years before turning a reasonable profit. Hitting them with a tax on turnover when they may be spreading red ink as they attempt to find their feet is absolute lunacy

However there is an issue that needs addressing here and it would be good to be aware of at least some initiatives from the governing party

My first port of call would be the EU and a country very close to home. More later

 

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