Tax & Accounting News

Plans to simplify UK tax system

23/07/2010

The government has announced proposals to cut the burden of tax compliance for UK companies by setting up a new Office for Tax Simplification (OTS).

Chancellor George Osborne said Britain had one of the most complex and opaque tax codes in the world, currently running to some 11,000 pages, and claimed he wanted to see a system where people were able to understand the tax laws they were being asked to comply with.

The new body will be chaired by former Conservative MP Michael Jack, and its director will be John Whiting, who is tax director at the Chartered Institute of Taxation.

It will initially conduct two reviews – one into streamlining the 400 or so tax reliefs, allowances and exemptions currently in place and one into how the tax system can be simplified for small businesses, including a review of IR35.

It will advise the government where it considers the system to be too complex but will not comment on the overall level of tax, while benefits and tax credits are also outside its remit.

Business chiefs welcomed the announcement, although the opposition said the new body was at odds with the government’s own actions, as it planned to make the system more complicated through the introduction of a married couple’s tax allowance and changes to stamp duty.

 

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