12-03-2008
Income shifting 'will affect small firms'
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Small business finances could be affected by anti-income shifting measures that may be introduced by Alistair Darling when he delivers his first Budget speech today.
Andrew Cave, spokesperson for the Federation of Small Businesses (FSB), suggested that income shifting could have a negative impact on business finances.
"If that were to come in, it would have a serious impact on a lot of our members," Mr Cave commented.
The FSB claims to represent the interests of some 205,000 members who are either self-employed or the owners of small businesses.
Mr Cave suggested income shifting would not motivate people to be entrepreneurial.
"So it's not just something that affects our members but the people they employ and the people they could potentially employ in the future," he added.
According to a government consultation document, income shifting is when the income tax system's fairness is undermined through the dissociation of some individuals "from income that they would have received in order that the income is taxed in the hands of another individual at a lower rate".