OTS provides timid solutions to tax complexity
The OTS suggests HMRC could do more to explain to individuals how to navigate the tax system, but Wendy Bradley thinks this is a timid approach, and its remit should be expanded to include a more wide-ranging challenge.
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Wendy Bradley is a retired tax inspector, now working as a freelance journalist.
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HICBC was about raising more revenue from higher earners without putting up the headline rate.
I agree with the suggestions in the article. It does not require a planet-sized brain to reduce the complexities of many of HMRC's requirements and the penalties that ensue upon failure to negotiate these. I have felt that, for some years now, HMRC have relied upon penalties to increase their tax take. Please tell me that I am mistaken!
I'll not countenance a word said against the OTS and the sterling simplification work they do.
Don't forget they did recommend and get abolished the 15p per day tax free luncheon vouchers.
I'll not countenance a word said against the OTS and the sterling simplification work they do.
Don't forget they did recommend and get abolished the 15p per day tax free luncheon vouchers.
15p ? I pay my staff 2/6d
3/- got two eggs and chips or a full vegetarian meal in the West End, and was a life-saver for someone in a bedsit pre decimalisation. Many companies ran their own staff lunch room so this was the best the small companies could achieve to attract staff. This approach to staff welfare quietly disappeared as the value of the tax-free perk diminished. So the various governments in between are responsible for us grabbing a lunch time sandwich at our desks, not talking to colleagues, taking a good screen break, etc. Did OTS do the right thing?
When the OTS was first set up my colleague and I went to see the OTS to talk about getting rid of National Insurance. We pointed out that it caused considerable costs for business (besides the tax itself) and created huge costs within HMRC itself which could be eliminated (salaries, NI (again), pensions, IT, estate, etc.). The response was that any changes had to be "cost neutral". They did not want to understand that by merging NI and Income Tax the whole matter of IR35 would go straight out of the window. We did talk about the elimination of CGT and IHT (and bringing everything into Income Tax) but they just did not want to know. We need a bold Chancellor to sort them out!
It seems that appointment to the OTS which, I expect, is in the gift of the Treasury (notwithstanding that the OTS is supposed to be an independent quango) is very much a penultimate stage between leaving a well-paid, highly regarded post somewhere and going into retirement with perhaps a few non-exec directorships. They should invite some of us in practice to the board, if only to hear some home truths.
Honestly, would we or our clients feel the difference if the OTS did not exist?
For further reading, see https://www.gov.uk/government/organisations/office-of-tax-simplification...
HICBC is a terrible charge, as it flies in the face of independent taxation- and also causes arguments amongst couples who are hit with not only the charge but also a penalty!!!
And of course when you're completing returns the client never tells you about it as the other spouse is claiming it and they don't know - and sometimes even if they ask the other spouse doesn't tell them...
Paying a living or ethical hourly wage does not equate to a full time living wage when so many low paid people are on zero hours or part time working contracts. So benefits (via UC) will still be needed, unless employers are obliged to employ staff full time (and all staff are willing to work full time).
OTS are, imho, a waste of space.
They merely suggest to HMRC how to better to sell the utter shambles engendered by HMRC's 'advice' to our dullard Parliamentarians which ends up as 'tax law'.
Thuswise Parliament collaborates, necessarily unwittingly, given their 'talents', to the opportunistic mendacity of HMRC - and creates the likes of OTS in a vain hope they will 'find a way out' so that Parliamentarians don't have to think.
Words fail me when I consider the disconnect between Parliament, HMRC and the reality that I live in.
Whilst they are best simplify the odd thing, with the other hand HMRC are hugely increasing complexity from Making Tax Difficult, through to trying to collect fines from landlords for not registering sales with HMRC within 30 days.
What happened to the "two out, one in" plan for red tape?
Dave Hartnett when at HMRC said it was impossible for any one person to understand the whole of the UK Tax legislation so is it not time to go back to square one and devise a system suitable for the 21st Century. MTS (Make Tax Simple) so we can all understand the obligations.
Micheal Grove suggested that on Brexit VAT be abolished and replaced with a form of sales/turnover tax thus getting rid of all the complex rules and regulations associated with VAT and possibly stamp duty etc.
..... MTS (Make Tax Simple) so we can all understand the obligations.
They tried that, back in the late 90s. Before they realised it wasn't simple, self-assessment was originally dubbed simplified assessment.
So RPI wold go up as the "cost" of the tax would be incorporated into the sales price (retail organisations have significant turnovers compared to profits). Somehow I don't think this is the answer.