Principles and practice of taxing small business

Stuart Adam () and Helen Miller ()
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Stuart Adam: Institute for Fiscal Studies and Institute for Fiscal Studies
Helen Miller: Institute for Fiscal Studies and Institute for Fiscal Studies

No W19/31, IFS Working Papers from Institute for Fiscal Studies

Abstract: The UK taxes business income at much lower rates than employment income. In this paper we describe the problems caused by that differentiation and assess the main arguments used to defend it. We summarise the Mirrlees Review’s proposals for radical reform that would align tax rates across legal forms while protecting incentives to save and invest. Finally, we consider the obstacles to implementing such a radical reform and suggest an approach to making progress in practice. This paper is a draft of a chapter to appear in G. Loutzenhiser and R. de la Feria (eds.), The Dynamics of Taxation: Essays in Honour of Judith Freedman, due to be published by Hart Publishing in Summer 2020.

Keywords: Tax; small business; self-employment; tax-motivated incorporation; entrepreneurship (search for similar items in EconPapers)
JEL-codes: H20 H21 H25 (search for similar items in EconPapers)
Date: 2019-12-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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