Do not leave tax simplification up to HMRC and the Treasury, says ATT

The Chancellor Kwasi Kwarteng said he will abolish the OTS and set a mandate to the Treasury and HMRC to focus on simplifying the tax code, in his ‘mini-Budget’ today.¹

Senga Prior, Chair of ATT’s Technical Steering Group, said:

“The axing of the Office of Tax Simplification is a shock, not least because last month (August) it was advertising for two additional independent board members.

“We worry the axing of the independent OTS is a retrograde step, not least because HMRC and the Treasury are potentially conflicted, especially where simplification for taxpayers could come at the cost of tax revenues, or an increase in departmental costs.

“The OTS currently draws directly and very effectively on the skills and expertise of those working in tax outside HMRC and the Treasury when making its recommendations for simplification. We are concerned that these views will be heard less and even potentially sidelined when the OTS is disbanded. The OTS was accessible and easy for professional bodies and other stakeholders to liaise with because of its many focus groups and keenness for views of those working in tax outside of government.

“We do of course see that both HMRC and the Treasury have a key role in identifying the scope for tax simplification. However, unless both departments have dedicated personnel who are able to engage as constructively with external stakeholders as the OTS has done, we cannot see simplification having any more than a 'nice to do it when you have a spare moment' priority in either department. In the case of HMRC, that is particularly significant given the under-resourcing in that department which is creating significant delays in many areas and the additional work which will be created by the introduction from April 2024 of Making Tax Digital for Income Tax Self-Assessment.”

Notes for editors

1. The Growth Plan – Treasury 23 September 2022:

Enabling companies to focus on business

4.13 Abolishing the Office of Tax Simplification – A simple tax system is critical for growth. Instead of having a separate arms-length body oversee simplification, the government will embed tax simplification into the institutions of government. It will therefore abolish the Office of Tax Simplification and set a mandate to the Treasury and HMRC to focus on simplifying the tax code.