The Office of Tax Simplification (OTS) has unveiled its interim report on small business taxation, contractors have been informed.

In the initial recommendations, the OTS discusses using a simpler regime for very small companies, what IR35 will be like in the future and merging National Insurance with Income Tax.

"Our aim is develop practical ideas that will make things easier for small businesses when it comes to their tax responsibilities," John Whiting, tax director for the OTS, said.

He added that the company aimed to tackle the concerns that it had heard expressed at representations and roadshow events.

When it came to the "thorny issue of IR35" he said that the document – which was released on March 10th – suggested ways of proceeding, although pointed out that easy solutions did not exist.

Furthermore, John Whiting, tax policy director at the Chartered Institute of Taxation, pointed out that it is crucial that professionals, such as contractors, are interested in their tax payments to avoid losing money.