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Accountants criticise government for ignoring OTS
The government has failed in its pledge to reform the tax system for the better, making it more complex rather than simpler, the Association of Chartered Certified Accountants (ACCA) has warned.
The professional body believes too much “tinkering” and failure to heed to expert advice have made tax more complicated for individuals and businesses.
The Conservative-Liberal coalition published the document Our Programme for Government in 2010, pledging to remove tax loopholes created by previous governments’ multifarious legislation – but ministers have failed to support the Office of Tax Simplification (OTS) and have instead implemented “prohibitive” and “badly designed” new rules, according to ACCA technical manager Jason Piper.
“It’s basic logic that the more complex a system is, the more loopholes there are – but since founding the OTS, the government has not given it enough of the support it needs or, indeed, the time to do its work,” he said.
“A recent example is changes to the taxation of partnerships: the government has implemented changes while the OTS is in the middle of reviewing partnerships more generally. It seems completely at odds with the reason for establishing the advisory body in the first place.”
He offered several examples of failure to simplify, criticising the “cliff-edge approach” to stamp duty that has seen policy makers ignoring “many opportunities to bring the application of stamp duty in line with other taxes”.
Other targets of his and the ACCA’s ire included the withdrawal of personal allowance for those on incomes of over £100,000, the transferable allowance for married partners, and the controversial mishandling of VAT rules that created the so-called pasty tax.
“This is just a snap shot of continuing problems with the UK tax system,” said Piper. “With less than a year to go until the next election, the government is limited to the time it has to make things easier, but it can give the OTS more support in the time that remains and set a precedent for future administrations.”
