Not more tax simplification please

For years I have been involved with the UK tax system wearing my hat as a partner in an accountancy firm.

Over that time, I have met with many fellow professionals who have all publicly acknowledged both between themselves and to their clients, the complexity of the UK tax system.  Of course this was done in the knowledge that without such complexity, the work of the accountant would be less in demand and certainly lower in value.

So it was, that we have all reacted with a mixture of feelings to the government’s recent announcement to establish an Office of Tax Simplification (OTS).  This new body of tax experts has been set up with wide ranging responsibilities to “… identify areas where complexities in the tax system for both business and individual tax payers can be reduced and to publish their findings for the Chancellor to consider ahead of his Budget”

The initial target for this new body is to focus on tax reliefs and small business simplification including the much criticised “IR35” rules.

The truth of the matter is that this body faces an almost impossible task as the British tax system is so convoluted that it  almost needs to be torn up and started again.  Furthermore,  my experience of similar initiatives in the past is that they tend to end up being more complex than the systems they replace.

Having glanced at the various discussion documents issued by HMRC on their website this week, rest assured that there won’t be many accountants looking for new employment. 

Apart from the fact that it will probably be years before anything reaches the statute books, it will require real vision and determination to make our tax system any simpler.