Political

The Office of Tax Simplification is on its way

A Treasury press release tells us:

The Chancellor George Osborne and Exchequer Secretary David Gauke today established the Office of Tax Simplification (OTS).

The Chancellor has appointed a Board of tax experts who will be responsible for leading the work of the OTS over the next year. The Board Members are Michael Jack (Chairman) and John Whiting (Tax Director).

Their responsibilities will be to identify areas where complexities in the tax system for both businesses and individual taxpayers can be reduced and to publish their findings for the Chancellor to consider ahead of his Budget.

The OTS will undertake two initial reviews over the coming year. They will focus on tax reliefs and small business tax simplification (including IR35). The OTS will publish the initial findings from their work on reliefs in late autumn and on small business tax by the 2011 Budget.

Good thing really that when, pre-election and pre-coalition, I wrote about the Conservative plans to create the OTS I said I (mostly) quite liked the idea:

Regular readers may have noticed my love of tangling with bureaucracy. (I did though decide discretion was the better part of valour when an a US immigration official gave me a form with a footnote which didn’t make sense. To anyone else subsequently who has been befuddled by that footnote too: I apologise. I can only say I was thinkings guns, deportation, Guantanamo.)

One pattern that is regularly repeated is that an outsider, dealing with a process for the first time, can often spot ways it can be made simpler or easier. Sometimes those thoughts turn out to be erroneous because there is actually a good explanation for an apparently baffling process. But often the thoughts turn out to be spot on because those who manage the system have so many other factors to worry about that simplicity never quite gets a proper look in.

So the idea of creating a team who is dedicated to making tax rules simpler is a good one. Placing the team outside the usual Treasury and HMRC structures means it is unlikely to lose its focus on simplicity as it will have only that one reason for existing …

But why make it a quango? The essential part of its success would be to have created a constructive tension between its drive for simplicity and government’s habit of complexity. That tension could be just as well nutured by beefing up a Commons select committee and adding an Office of Tax Simplification as its research arm – with the added bonus that this would also add teeth to Parliament’s attempts to be a genuine check on the actions of government.

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