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.”