How can we make taxation simpler?
The AGM had the chance to look at some things apart from our day-to-day issues, Building Our Future or structural pay aims. John Whiting from the Office of Tax Simplification (OTS), and an HMRC Non-Executive Director, gave a short and relatively light-hearted talk on the work of the OTS. This included such facts as how the OTS had reduced the number of reliefs to 999, only for the Government to then ramp it up again to 1154. We are now in the mid-12th century (the BBC says the Middle Ages began on 19 December 1154 when Henry II became King). On present trends we will soon reach Magna Carta (1215).
The OTS is working to reverse this growth. John tested the audience’s knowledge on a range of arcane legislation and procedures (Q: why is there a separate National Insurance bill? A: Because Parliament likes doing it that way) It has recently produced a comprehensive review of small company taxation – with a wide range of possible simplifications, such as more cash accounting or a ‘look-through’ approach. Other areas of work were the different treatment and definitions of employment/self-employment. We learned that in one fiscal jurisdiction, a key determinant is whether a person has a nameplate on their desk – clearly a proxy for whether the individual is an integral part of the business. Or how tax based on the number of tables in Spanish restaurants is avoided by using barrels on which to serve tapas.
There was a lot of questions, so much so that John invited ARC members to provide him with some real examples of areas where simplification was needed and could be achieved. He also wondered if ARC Committee, as part of its work developing ARC’s role as a professional association, could be one of the groups the OTS approached to discuss new work. I think this would be a very welcome move and would give members the chance to feed back to us on some nuts and bolts of the tax system. My favourite hobby horse – which will never happen – is to abolish NICs completely and adjust tax rates in exchange.
As our new website is now up and running I will be working with the developers to see if we can provide links to sites such as the OTS, or host some form of online survey about simplification – and maybe get some votes for ending NICs? Of course, if anyone feels so strongly about some part of simplification they cannot wait, we’d be happy to gather up the comments and prepare a note for the OTS.
As the OTS will shortly become a statutory body, with a new and broader remit, it has produced a future strategy consultation document. Follow the link to read the document and add your comments.
Photo: John Whiting at the ARC AGM, April 2016.