Since the closure of the Office of Tax Simplification (“OTS”) which was announced in the September 2022 mini-Budget, the Institute has been discussing tax simplification with HMRC at various forum meetings. A key recommendation was the need for an annual report on tax simplification which also features in the Next Financial Year 2023 due to be published after the summer. HM Treasury has recently confirmed that it will report annually on progress on tax simplification. The confirmation came during Treasury questions, when the Financial Secretary to the Treasury Victoria Atkins told the chair of the Treasury Committee that a report will be sent to the Committee once a year setting out what progress has been made on tax simplification.
The decision to do so also follows on from a House of Commons Treasury Committee report published last month which concluded that the tax system is overcomplicated and “This overcomplication creates compliance burdens, confusion, and disincentives to work or grow a business. It is an obstacle to economic dynamism. (Paragraph 8)”. The Institute continues to also recommend that an independent body is still needed to tackle tax complexity.
The Treasury Committee also concluded that disbanding the OTS risks signalling that tax simplification is not a priority for the Government, and that the most important factor in securing a simpler tax system in practice would be the Chancellor taking, and acting on, the personal responsibility for simplification that he has pledged. It also concluded that the Government’s performance against its stated intention to simplify the tax system must be subject to public scrutiny.