Signposts reading "complicated" pointing left, and "simple" pointing right

Professional bodies challenge government on tax simplification

6 April, 2023

Leading tax and accountancy professional bodies have come together to propose a series of actions ministers and officials should take if they are serious about delivering a simpler tax system.

Senior representatives from the Association of Taxation Technicians (ATT), Chartered Institute of Taxation (CIOT), Institute of Chartered Accountants in England and Wales (ICAEW), Institute of Chartered Accountants of Scotland (ICAS) and the CIOT’s Low Incomes Tax Reform Group (LITRG) made the calls in a letter sent today to the Financial Secretary to the Treasury (tax minister) Victoria Atkins MP.

In their letter the bodies express their regret at the government’s decision to abolish the Office of Tax Simplification (OTS) – announced in September 2022 and legislated for in the current Finance Bill – but welcome the Chancellor’s assurance that simplifying tax remains a priority and that officials in the Treasury and HMRC have been given a mandate to focus on simplicity in tax policy and administrative design.

The bodies offer their support to help Treasury and HMRC officials achieve simplification, and set out a number of processes which the government should introduce to deliver on its promises, and demonstrate its commitment to tax simplification.

The signatories said:

“In our view, the Office of Tax Simplification achieved a significant amount and with greater ministerial support could have done even more, so we regret the government’s decision to abolish it. Nevertheless, the clear mandate given to officials in the Treasury and at HMRC to focus on simplicity in tax policy and administrative design is positive.

“We want to see tax simplification embedded as promised, and we offer our support to help officials realise this aim.”

The letter outlined the processes the bodies said were needed:

  1. Identify the characteristics of tax simplification

  2. Ensure someone is accountable for delivery of tax simplification

  3. Include simplification declarations in tax information and impact notes

  4. Gaining external input to policy design and implementation

  5. Seek feedback from a broad range of stakeholders

  6. Ensure HMRC and Treasury engagement groups include tax simplification as a standing objective

  7. Increase awareness and improve guidance

  8. Allow time for development and integration of systems

  9. Adopt a consistent approach across tax regimes

The letter comes as members of the House of Commons Treasury Committee have tabled an amendment to the Finance Bill that, if passed, would require the Treasury to report annually to the Committee on Tax Simplification if the OTS is abolished. The cross-party group of MPs, including chair Harriett Baldwin and a majority of the committee, have also tabled an amendment that would have the effect of removing the clause abolishing the OTS from the Bill.

Notes

1. The letter can be read here.

2. The signatories to the letter are:

Jane Ashton, Chief Executive Officer, Association of Taxation Technicians

John Cullinane, Director of Public Policy, Chartered Institute of Taxation

Frank Haskew, Head of Tax, Institute of Chartered Accountants in England and Wales

David Menzies, Director of Practice, ICAS

Victoria Todd, Head of Low Incomes Tax Reform Group, Chartered Institute of Taxation

3. The Finance Bill amendments can be found here.