Bakery businesses are being urged to sign an online petition against the new family business tax.

The e-petition is now among the top 50 most-signed petitions on the Number 10 website, with over 6,000 signatures, claims Professional Contractors Group (PCG), which represents the UK’s freelancers.

In 2007, the Chancellor of the Exchequer announced his intention to prevent "income shifting". He said it was the practice of splitting income between two people to make use of the tax allowance of the lower-earning partner.

The new tax will target all jointly-owned businesses, and family businesses in particular. "It penalises people who have jointly set up businesses in exactly the way recommended for years by the government," according to PCG, "and makes it impossible for small businesses to self-assess their tax liabilities, adding another crushing administrative burden."

Businesses will have to keep extensive records, according to PCG. They will then have to justify the distribution of profits to family members or other joint owners if the taxman investigates them.

"Even if you are not clobbered by a tax investigation, you will still have to jump through all the hoops and keep all the records," commented John Brazier, MD of the PCG.

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