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

Oxford Legal Studies Research Paper No. 25/2011

73 Pages Posted: 8 Apr 2011  

Judith Freedman

University of Oxford - Faculty of Law; Oxford University Centre for Business Taxation

Claire Crawford

Institute for Fiscal Studies

Date Written: June 6, 2010

Abstract

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

Freedman, Judith and Crawford, Claire, Small Business Taxation (June 6, 2010). DIMENSIONS OF TAX DESIGN: THE MIRRLEES REVIEW, Stuart Adam, Stephen Bond, Robert Chote, Paul Johnson and Gareth Myles, eds., Oxford University Press, June 2010 ; Oxford Legal Studies Research Paper No. 25/2011. Available at SSRN: https://ssrn.com/abstract=1804333

Judith Freedman (Contact Author)

Oxford University Centre for Business Taxation ( email )

Worcester College
Oxford, Oxfordshire OX1 2HB
United Kingdom

University of Oxford - Faculty of Law ( email )

Worcester College
Walton Street
Oxford, Oxfordshire OX1 2HB
Great Britain

Claire Crawford

Institute for Fiscal Studies ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

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