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The Federation of Small Businesses (FSB) has criticised the complexity of the current tax system and how it adversely affects small businesses.
FSB representatives appeared to give evidence to a House of Lords Committee examining the clarity and simplicity of the Finance Bill and how it relates to tax.
The FSB told the committee that tax legislation needs to be clearer, more specific and easier for businesses to comply with.
Mike Cherry, FSB financial affairs chairmen, said: "Small businesses consistently tell us that a stable and simple tax system would allow them to create more jobs and stronger local economies."
He criticised the confusing nature of past developments, commenting: "Among the changes in the past few years were tax incentives for small firms to incorporate, followed soon after by tax incentives for small firms to unincorporated - a costly and complicated procedure and a bizarre process for the government to expect small businesses to go through."
Mr Cherry also criticised tax developments in the 2007 Budget which were designed to provide small businesses with tax mitigation. He maintained that the changes were overly complicated and that many small businesses did not even qualify for them.
The changes to tax planning in the latest Budget were the latest in a long line of major changes to small business taxation since 1997.
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