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I offer you two quotes. The first is the opening line of the recent Treasury Committee report on tax reliefs (tinyurl.com/tax-reliefs-report): ‘Our tax system is too complicated.’
Here is the second: ‘The British tax system is incredibly complicated and riddled with uncertainty. It treats the taxpayer and his advisers as negligible; considers simplicity only when the Inland Revenue’s convenience is at stake (and rarely even then) and altogether ignores certainty. The complexity and uncertainty of our tax rules mean wasting millions of man hours each year in avoidance and counter-avoidance, apart from the need even for the non-avoider to find out what his liability is.’ Apart from the reference to the Inland Revenue (and perhaps the use of ‘his’) this could have been written yesterday, but in fact it comes from a book published in 1969 , provocatively entitled The Power to Destroy – a Study of the British Tax System by D R Myddelton.
I came across this quote recently when, as is so often the case, I was looking for something else. I share it with you because I think it does help to put some of the debate about simplicity and the relationship between the taxpayer and the state into perspective.
There is a tendency, particularly as we get older, to look back to the golden age when the tax system was straightforward, people knew where they stood and dealing with the Revenue was easy. Some of that is probably true but rose-tinted spectacles give a distorted view of reality. Simplification is as far off now as it ever was but let’s not pretend complexity is only a recent problem.
If you do one thing…
See HMRC’s updated guidance on reporting profits for the transitional year for accounting years that do not end on or between 31 March or 5 April – tinyurl.com/hmrcbasisofassess.
