Office of Tax Simplification update, November 2017

Nov 20, 2017

The Office of Tax Simplification continues its work and has recently examined VAT and stamp duty with news also of a new project looking at capital allowances and accounts depreciation.

During the summer, the OTS published and laid in Parliament its report on paper stamp duty with recommendations to reform, digitise and simplify this outdated system.  The report follows on from the call for evidence and progress report published in March 2017.  The accompanying press release is also available.

A focus paper to stimulate debate about the future of disincorporation relief has also been published together with correspondence between the Chancellor and the OTS regarding recent OTS publications.

The OTS also recently began a new review focused exploring the impact and challenges of replacing capital allowances with accounts depreciation. This work follows up one of the main recommendations in the OTS’s review on Simplifying the CT computation published in July 2017. As part of this work, the OTS has now published a call for evidence.

This project relates to tangible fixed assets only and will focus on whether the use of accounts depreciation to provide relief for capital expenditure instead of capital allowances would simplify the preparation of tax returns for incorporated and unincorporated business.

At a basic level it would no longer be necessary to allocate assets to various computational pools for capital allowances.  Instead, the treatment of assets required for preparation of the accounts would flow through to the tax return.

An outline of its future work programme has also been published.  The paper identifies areas of interest that the OTS will be looking at over the next year and beyond.  The OTS is seeking to apply its resources to measures that will benefit the greatest number of people on the largest number of occasions, while not missing opportunities for ‘quick wins’ that benefit small numbers of people in a useful way.

The OTS also recently published its first review of VAT and issued a report on routes to simplification for VAT.