Comment

Challenging tax complexity

Paul Morton, tax director at the Office of Tax Simplification (OTS), outlines the importance of his organisation’s work in bringing a systematic approach to taxation and expands on what the future holds.

The OTS is the adviser to government on simplifying the UK tax system. Although we are based within the Treasury, we have an independent mandate under the 2016 Finance Act and we are governed and guided by our chair, Angela Knight, and our board, including independent directors. Our team consists of HMRC and Treasury career civil servants as well as those who have had a wide variety of careers in the private sector, including business and small and large professional firms. 

As far as we are aware, the OTS represents the first endeavour in the world to bring a systematic and thoroughly researched approach to tax simplification. We provide our advice in three ways. 

Firstly, we produce formal reports, requested by the chancellor, which set out detailed analysis and practical recommendations in particular areas of the tax system. Since 2010 when we were formed, we have made over 400 recommendations, of which more than half have been implemented. Secondly, we produce analysis on challenging structural issues to inform the debate and contribute to the thinking. Thirdly, we publish focus papers which examine the implications for tax of societal, economic and business changes. Our focus paper on the gig economy is a good example of this.

As independent advisers, we are strongly connected both within government and with a very wide range of expert tax practitioners and business representatives. 

We aim to ensure that everyone who wishes has an opportunity to engage with us and we welcome the widest possible range of views and experiences. Indeed, the work of the OTS is rooted in improving the experience of all who interact with the tax system. Our aim is to reduce the administrative burden – which is what people actually encounter in practice – as well as simplifying the rules themselves. 

Once we have set a project in motion, we gather views and evidence from all interested parties including taxpayers, businesses large and small, representative bodies, advisers, think tanks, academics and others, including frontline HMRC staff. We put considerable effort into making sure we gather input from the whole of the UK. We are grateful to our many contributors and supporters, including those who serve on the Consultative Committees formed to advise on particular projects.

Over the next few months we expect to be publishing reports on the corporate tax computation, paper stamp duty and VAT, as well as our first annual report and a review of recommendations from past work which are relevant today. We also expect to publish an update of our focus paper on the gig economy. 

We are also working on a pipeline of projects for the next few months, the next three years and the longer term so that we have a clear view as to where the priorities will be set. We will be guided by the new government, of course, and we welcome views from all of our stakeholders as to which areas we should be addressing.  

The OTS has always focused as much on the administration of taxes as on the legislative framework, and this will continue. The experience of those interacting with the tax system, whether as private individuals, businesses, advisers, or indeed HMRC staff, will continue to inform and motivate our work programme. Perceptions are important as they may determine whether a feature of the tax system works as intended. For business, it is vital that tax administration does not unnecessarily inhibit investment, productivity or efficiency. To inform our ongoing work we are particularly interested in hearing from taxpayers about practical challenges they face in dealing with their tax affairs. 

Looking further into the future, it is clear that technology will be a part of everything we do. We are looking at ways in which technology is transforming how tax can be administered, both in the UK and internationally, and at the way the business world is changing. We are also engaged with HMRC’s ‘Making Tax Digital’ programme. 

Finally, we welcome comments, feedback and suggestions. We are always interested in hearing from everyone who touches the tax system about their experience and how we can make it simpler.

“the work of the OTS is rooted in improving the experience of all who interact with the tax system”

FOR MORE INFORMATION

W: www.gov.uk/government/organisations/office-of-tax-simplification