Chartered Accountants Ireland as a member of CCAB-I has responded to the government consultation “Taxation of Micro Enterprises – reduction in compliance costs”. In the submission we deal with the Consultation's stated objective of “cutting compliance costs and making starting a business much less daunting by introducing a simplified accounting and profit calculation regime for micro businesses”. But we also recommend other reforms of tax compliance for the good of the micro-enterprise sector.

The key points in the submission include:

• We recommend that incorporated micro-enterprises are included in the simplification measures. The Consultation specifies only sole traders/partnership should be beneficiaries of the simplification measures. If the compliance cost cutting initiative is to be fair and successful, then it should be available to all taxpayers.
• We agree with the Consultation's suggestion that unincorporated micro-enterprises should be given the option of calculating their taxable income on a simple cash receipts and payments basis.
• We suggest a threshold of €250,000 is more appropriate for a job-creating micro-enterprise and also recommend that the threshold should be increased over three years starting from when the micro-enterprise commences to operate under the simplified accounting regime.
• Taxpayers should be required to make an active choice to apply the proposed simplification measures.
• We propose a single annual consolidated return of PAYE, VAT and “profit” tax with profit tax measured on a calendar year basis.
• We highlight the need for improvement in the quality of customer services provided by Revenue while noting the recent restricted telephone service being operated by a number of Districts.

The submission is published on here of this issue of tax.point.