The idea
For VAT registered very small companies (turnover £50k) who file their VAT online (a) provide them with the option to have PCTCT (profits calculated and used for determining corporation tax) based on the previous 4 quarters VAT returns, and (b) thereby eliminate the requirement to support and file a separate corporation tax return calculation and full statutory accounts.
In addition, for very small companies electing to continue to file the existing summary corporation tax return, an ultra simplified self assessment form and half page guidance note should be introduced.
Allow very small companies to use their accounting period as the tax period if it ends within 3 month of the tax period (currently, if the accounting period does not coincide with the tax period then two separate tax calculations need to be prepared each year using two different accounting periods and sets of accounts — just by reading this you can start to see just how unnecessarily overcomplicated and bureacratic filing is for very small companies).
Why is it important?
The annual corporation tax return and the supporting workload needed to prepare it (e.g. preparing full statutory annual accounts and completing the CT form) is a major administrative burden for very small companies. There is little difference in the burden faced by very small companies compared to larger sized small companies.