New tax forum 'snubs small businesses'

The Forum of Private Business (FPB) has criticised the government for "snubbing" small businesses in its plans for a new business-government forum on tax.

Earlier this week, the chancellor announced plans to create a forum that will explore the challenges faced by the UK tax system. He said the new group will "ensure that competitiveness remains at the heart of any future reforms."

The forum will be chaired by the Treasury's financial secretary Jane Kennedy, and will comprise 10 senior representatives of multinational companies.

However, the FPB argues that the UK's smaller firms should be consulted too, because they "suffer most because of the disproportionate tax burden". The FPB points out that while the tax rate paid by bigger companies was cut in the 2007 Budget, smaller firms' corporation tax has gone up from 19% to 21% over the last 12 months and is due to increase further in April 2009 to 22%.

"We can accept that the large multinational companies have more complex tax concerns than most small businesses, but the impact that higher taxes have on our members is just as damaging," said the FPB's policy representative, Matt Goodman.

"Doing a better job of consultation, and discussions with the taxpayer, would help them understand the reasoning and process behind tax changes. By that logic, the Treasury should consider putting together a similar group focused on the process of small business taxation."

The FPB's criticism is only the latest in a series of accusations that the government is too focused on the needs of larger firms.

At the beginning of this year, a member of the government's Small Business Forum resigned, complaining that small and medium enterprises were no longer being listened to by the government.

In March, the government responded to pressure from lobby groups, and announced that a small business working group would be created within the Business Council for Britain, a body which is currently made up exclusively of representatives from big business.