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Tories' new take on tax simplification
A report by a working group headed up by ex-chancellor Lord Howe is recommending that the next conservative government should make some radical changes to the way that new tax legislation is drawn up and scrutinised in order to simplify the UK’s tax code.It suggests the establishment an Office of Tax Simplification (OTS) to examine the existing tax code and make proposals for simplification. As well as being staffed by HMRC and academia, the OTS should also include individuals from the tax professions to provide expertise and a fresh perspective.
A new Joint Parliamentary Select Committee on Taxation (JPSCT), should also be established, with membership drawn from both Houses. The new committee would improve the scrutiny of government initiatives and proposals, and would receive written and oral evidence from external experts. It would also examine and make recommendations on proposals presented to it by the OTS.
Finally, a new government would also re-establish the Pre-Budget Report as the time to propose technical changes to tax law before the Finance Bill in which they
are to be included. The report says “This would have avoided many of the problems we have seen over the last year, with badly thought through proposals produced with little consultation and last minute legislation rushed through Parliament without sufficient scrutiny.”
The report ‘Making taxes simpler’ is the product of Lord Howe’s tax working party was established last year by the Shadow Chancellor, George Osborne MP, to take forward the recommendations of the Forsyth Tax Reform Commission regarding the making of tax law.
The Chartered Institute of Taxation (CIOT) has commented that two of its major concerns have been addressed in the report: simplification of the tax system and detailed consultation.
Nick Goulding, CIOT President, said: “This is a welcome contribution to the debate around these two key issues. A complex tax system leads to avoidance and inefficiency of collection. As we have seen recently over CGT and the non-dom changes, it is vital to have detailed consultation in order to avoid unintended consequences.”
Number of comments: 6
AccountingWEB.co.uk 4-Jul-2008
Categories: Tax News, Tax - Nicki Ross Martin
Times read: 1805
I thought the definition of a closed system was one where energy cannot get in or out - the tax system, having external human intervention, is not then a closed system and decreases of entropy will still be possible.
There may still be hope !
But as any fule kno, the entropy of a closed system will always increase, hence it is impossible to reduce the complexity of the tax system.
Case in point: just look at the increase in disorder resulting from "abolishing" the 10% band under the proclamation of simplification ...
Simon (post above): erm, did you miss the sense of irony inherent in my posting ?! It seems a law of "politics" or "government" that entropy / complexity of regulations increases monotonically ... any "simplification" (c.f. 10%) is purely illusory
I just hope that this new Office of Tax Simplification (OTS), will draw its staff from the current offices of HMRC, etc, and not be staffed by newly employed people? The last thing we need is more people on the Government payroll!!!
Yes, just think of the many regulations they could scrap if they just came out and said, "We think HS * consultants are tax-dodgers and will be taxed more highly; right, the rest of you ..."
* apply the 2001 "HAL->IBM" transformation
I can't help making the observation that it appears that order to simplify tax law it seems that the only way around it is to ensure that the process of creating the law itself needs to become more complicated.
It seems like complete madness, but then again, given the present mess why would anyone ever trust any chancellor again?
Lord Howe's report was endorsed and adopted by George Osborne who also chaired the Q&A session afterwards.
Although these proposals don't go as far as creating a distinctive technical bill each year, there was a clear commitment to avoid the sort of rushed policy changes we have witnessed in recent years. Of course the proof of the pudding...
I remember when Ken Clarke combined the Autumn spending statement and the Budget on the basis that it made sense to tell the country at the same time how he would finance the spending commitments. Mr Brown moved the Budget proper back to March to allow himself two grandstands a year. And look where that has led us.
