Modelling the Impact of Taxation on the Small-Business Economy: The Natwest/MBS Tax Index for the Self-Employed, Sole-Traders, and Partnerships

Abstract
The authors describe the development of a model for the evaluation of the tax affairs of UK small unincorporated firms (with fewer than 20 employees). After a brief review of the literature relating to small-business taxation, the main parameters of the NatWest/Manchester Business School tax model for unincorporated businesses are established, Subsequently the model is employed to evaluate small-business taxation from two angles. First, the authors offer a post-1999 budget analysis of the impact of taxation on small-business owners and their employees. Second, the authors discuss a set of proposals which have the potential to improve the neutrality of the tax system towards small-business owners' decisions.

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