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The UK tax system defies attempts to simplify it

Having a contractor accountant has never been so beneficial. Back in 2010, the Chancellor launched an initiative called the Office of Tax Simplification (OTS) to provide the Government with advice on how to simplify our tax system. This year, before the Budget, the OTS published a number of reports including one on small business, another on employee share schemes and an interim report regarding pensioner taxation. In so doing, some 100 pages of tax law have been eliminated so far.

However, in October this year and despite the progress made, the head of the OTS, John Whiting, admitted that the UK tax system would never be made simple despite his brief to drive complexity out of it. Instead, he believes that taxpayers can only hope for simpler tax rules rather than live in the expectation of them actually arriving. He believes that by clarifying some tax laws it may, in fact, add more text to them despite his remit to reduce their volume overall.

The job of the OTS is not yet over. While work on such contractor issues as IR35 is now complete, attention is being focused on generating a shortlist of further tasks from another 20 or more different issues. For the small businessman and independent contractor, all such changes must be monitored and evaluated – especially so when those 20 additional issues also include the treatment of VAT and business interest payments, including employee expenses. Support from a cheap accountancy for contractors is considered essential to stay on the right side of any newly modified tax laws.

Posted by Peter
November 12, 2012
Tax

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