UK tax system complicated? You don’t say...
One of George’s brightest and best ideas, and one of the first to be implemented after he took up the mantle from Alistair ‘Eyebrows’ Darling was the creation of the Office for Tax Simplification (OTS) charged with, well, deciding whether the UK tax system needs simplifying.
They were given 2 initial tasks- to review the list of current UK tax reliefs and to review the taxation of small businesses. The tax reliefs review is now complete and the OTS have concluded the UK tax system is a “spaghetti bowl” of tax reliefs. Clearly, this is news.
Drawing together the tax policy director of the Chartered Institute of Taxation, ex-Financial Secretary to the Treasury and some of the brightest* names in professional practice, the OTS are the new champions, attacking the 1,042 UK tax reliefs detailed in their first brief. Well, actually, although 1,042 reliefs were identified, they actually only looked at 155 of them. Let’s hope the remaining reliefs weren’t too complicated even for them...
Anyway, their first final report is out and they make some interesting, and some long overdue recommendations:
- Merging income tax and national insurance- of no concern to employees, but likely to piss pensioners off mightily
- Have a de minimis limit of £100 for employee benefits, and increase the limit for ‘higher paid employees’. Even the Government have to admit that £8,500 is less than full-time minimum wage, so to describe this as high earnings is, well, stupid.
- Reviewing inheritance tax, and capital gains tax for companies
- Doing something dull with landfill tax
So there we have it. The culmination of months of work telling us (largely) the bleeding obvious. Still, you can expect to see at least some of these measures in the Budget later this month, and if he maintains his recent policy, George will probably consult (ask people’s opinion before doing what he wants anyway) on some of the other measures before introducing them in 2012 or beyond. Exciting stuff. Ish.
*perhaps they are bright like a lightbulb