The government has announced that the Office of Tax Simplification (OTS) will be abolished and replaced with a general mandate to HM Treasury and HM Revenue & Customs to focus on simplifying the tax code.
The OTS was set up by David Cameron in 2010 to provide independent advice to the chancellor on options for simplifying the current tax regime. Over the last 10 years, the OTS have published a significant number of recommendations, and have had successes in achieving simplification on specific tax points, such as extending the reporting and payment deadline for UK property related capital gains tax charges, and reducing the paperwork associated with inheritance taxes. However, they have arguably faced insurmountable political obstacles in driving forward broader simplification to the tax regime and the tax system continues to become progressively more complex as new legislation is introduced.
The then Chancellor, Kwasi Kwarteng, made clear his focus on reducing the compliance and regulatory burden on businesses, and has expressed his aim to "embed tax simplification into the heart of government", making this a mandate of both HM Treasury and HM Revenue & Customs. It remains to be seen whether this agenda will now be driven forward with sufficient energy and investment to make true progress and whether the loss of an independent body tasked with promoting tax simplification will improve or impede progress in this area.
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